Harvest Gold's Rosebud Revival
By James West
Nevada is the home of the new business model in gold mining: Find a past-producing mine where lots of known ore-grade material was left behind during the deflated gold price era in the later nineties, and put it back into production. It’s a straightforward approach (for mining) that has a well established track record.
Harvest Gold (TSX.V:HVG) is planning just such a revival for the Rosebud Mine.
The Rosebud Mine property includes the Rosebud Mine and 54 claims covering approximately 1,115 acres in Pershing County in northwest Nevada, approximately five miles to the south of the Hycroft mine which produced more than 1,000,000 oz of gold and 2,000,000 oz of silver.
Harvest Gold holds an option to acquire a 100-per-cent interest in the Rosebud project, subject to a 3-per-cent net smelter return royalty, 50 per cent of which can be purchased for $2.25-million
The Rosebud Mine was a joint venture between Newmont Mining (NYSE:NEM) and Hecla Mining (NYSE:HL) that operated between 1997 and 2000. According to Hecla’s annual report,, the Rosebud mine produced 385, 450 oz of gold and 1,253,604 oz of silver between 1997 and 2000. The production was from a proven and probable reserve of 500,441 oz Au and 3,446,912 oz Ag (1996 Hecla annual report – Not N.I. 43-101 compliant).
Harvest’s plan is to focus on 3 areas: (1) Evaluation of historic gold mineralization that
remains on the property; (2) Exploration for near surface, high-grade gold mineralization
similar to that which has been discovered on the property in the past; and (3) Exploration for
large bodies of gold-silver mineralization at depth.
As disclosed in the Hecla Mining Co.'s 1999 annual report, “gold mineralization in the South, North and East zones, as in many other volcanic-hosted gold deposits, is erratically distributed with numerous low-grade drill hole intercepts interspersed with higher-grade drill hole intercepts over an area approximately 1,000 feet east-west by 1,000 feet north-south. Drilling has also intersected further mineralization proximal to the mine."
Hecla Mining's 1996 annual report quotes a Rosebud resource of 1,276,634 tons grading 0.392 ounce gold and 2.70 ounces silver per ton containing 500,441 ounces of gold and 3,446,912 ounces of silver at a cut-off grade of 0.18 ounce (5.2 grams) gold per ton. This pre-mining resource (1996) was not National Instrument 43-101-compliant, but was based on over 260,000 feet of surface and underground drilling in and around the mine area.
Besides the possibility of establishing an open-pit-style resource, the Rosebud gold mine area is considered to have excellent exploration potential for higher-grade gold and silver mineralization in several areas that were not included previously in the historic mine workings or resource calculations. This is supported by available data from historic drill holes in the Dreamland (1.9 metres of 25.4 grams per tonne (g/t) gold) and Northwest corridor (5.1 metres of 13.8 g/t gold and 3.9 metres of 16.2 g/t gold) areas, as well as other locations on the property.
Drilling on the Rosebud is expect to begin during mid to later summer this year on targets identified from soil samples using the “enzyme leach” process, a technique particularly well suited to Harvest because of the vast experience in that field of Harvest Gold (U.S.) President Greg Hill, who also just happens to be the President of the Geological Society of Nevada.
Also assisting in the interpretation of geophysical and geochemical data for drill target identification is Holly McLachlan, who spent two years as a geologist at the Hecla/Newmont Gold
Corp. Rosebud JV while the deposit was being mined. Her exploration and development efforts
there included mapping and managing surface core and RC rigs and an underground development core drilling program in order to delineate potential deposit extensions and new deposits.
The company has cash on hand thanks to the exercise of all of its warrants from a previous financing. Harvest’s press release of December 4, 2007 reported that 6,975,500 warrants had been exercised resulting in total proceeds of $1,395,100. The two year warrants were attached to Harvest Gold’s initial Plan of Arrangement financing, when the Company’s shares began trading in December, 2005. One warrant entitled the owner to purchase one common share of Harvest Gold for $0.20.
Harvest Gold’s business model of securing strong joint venture partners, when appropriate, is well known in Nevada and is renowned for assisting companies in preserving their cash.
Besides the Rosebud project, Harvest is exploring and evaluating each of its other eight properties: the Longstreet Mine Gold Property and the Garcia Flats Property in Nevada and the Assean Lake Gold Property, the Wyatt Claims, the Le Savage North and South Properties, the Con Claim, the Conley Estate Claim, and the Vena Claim, all in Manitoba.
