A chaotic year has sent gold and silver prices up to some of their highest points in years and created new opportunities for exploration activities. In many cases, however, these new opportunities are coming from old sources. The globe is scattered with past-producing mining properties that have been shut down either because the exploration and production technology of the time wasn’t able to fully realize the property’s potential, or because resource values were too low to make exploration and development worthwhile. Past-producers often have the advantage of historic exploration data, and with resource values near historic highs, they can offer excellent opportunities for value. For companies like Blackrock Gold Corp. (TSXV:BRC) (OTC:BKRRF), Kirkland Lake Gold Ltd (TSX:KL) (NYSE:KL), AngloGold Ashanti (NYSE:AU), Yamana Gold (NYSE:AUY) (TSX:YRI), and Premier Gold Mines (TSX:PG) (OTC:PIRGF), what’s old is new again.
Blackrock Gold Corp. Revitalizes the Historic Tonopah Silver District
The Tonopah Silver District is the second-largest silver district in the State of Nevada. When the district was discovered in 1900, Tonopah was considered the state’s last great silver district. Tonopah is still, to this day, considered to be one of the most desirable mining districts in the state. To date, the Tonopah Silver District has produced more than 174 million ounces of gold and 1.8 million ounces of silver. Despite this, production at Tonopah shut down nearly 100 years ago. In February, however, Blackrock Gold Corp. (TSXV:BRC) (OTC:BKRRF) consolidated the entire western half of the Tonopah Silver District. The company’s Tonopah West land package includes 97 patented and 17 unpatented mining claims covering 4.5 sq km (1,100 acres).
Blackrock is the first company to bring modern exploration to this historic mining district. Blackrock announced its first drill results from the Tonapah in July, reporting assays of 2,215 G/T silver equivalent over 3.0 meters within 4.6 meters of 1,577 G/T silver equivalent. They also hit 29 meters of 965 G/T silver equivalent in the same drill hole! The company announced its second drill results, and second discovery of their maiden program from Tonopah in early September, drilling 2,215 G/T silver equivalent over 3.0 meters within 4.6 meters of 1,577 G/T silver equivalent, which was found over a mile away from the first discovery.
“As the first group to target the historic workings within this prolific, historic silver district in the heart of Nevada, our first drill hole, having encountered multiple significant high-grade veins, is nothing short of remarkable,” Blackrock President and CEO Andrew Pollard said on the company’s initial drill results.
Past-Producers Reopen Around the World
On August 10, Premier Gold Mines (TSX:PG) (OTC:PIRGF) announced that the company had entered into a definitive purchase agreement with Waterton Global Resource Management to acquire a 100% interest in the Getchell gold project, located in the Getchell gold belt near Winnemucca in Nevada. Getchell previously operated from 1980 to 1999, and, according to the company, has a long track record of successful gold production.
Yamana Gold’s (NYSE:AUY) (TSX:YRI) El Peñón mine in Chile has been producing high-grade gold and silver continuously since 1999. However, in 2020, Yamana has been finding success by returning to past-producing areas of the mine. In September, the company announced that exploration results had highlighted the strong potential in expanding historic sectors of the mine. These historic expansion zones are located adjacent to existing infrastructure, which the company says would allow them to increase productivity and extend the mine’s lifespan while lowering costs.
In December 2019, AngloGold Ashanti (NYSE:AU) poured the first gold from the past-producing Obuasi mine in Ghana since the mine’s relegation to care and maintenance in 2016. The Obuasi mine dates back to 1897 and is expected to produce as much as 400,000 ounces of gold per year now that it has been reopened.
In 2019, Kirkland Lake Gold Ltd (TSX:KL) (NYSE:KL) reopened the Holloway mine, part of the company’s Holt Complex in Matheson, Ontario. The Holloway mine was placed on care and maintenance in December 2016 around the time of Kirkland’s acquisition of the property via its acquisition of St Andrew Goldfields Ltd. The Holloway mine has been a key part of Kirkland Lake Gold’s exploration efforts in 2020.
Companies like Blackrock Gold Corp. know that their historic assets still have plenty more to offer. The recent rise in gold and silver prices is revitalizing the mining industry and creating a rare opportunity to extract huge value from past-producing assets.
