The same people who found a mountain of gold where no one else expected to find one in the Pequops range 30 miles east of Wendover are now looking for more of the yellow stuff just to Wendover’s south.
Animas Resources Ltd. announced that it has signed a letter of intent to sell its interest in the Kinsley Mountain gold project in Nevada to Pilot Gold Inc.
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The Kinsley Mountain Property is located in extreme eastern Nevada in Elko County between the towns of Ely and Wendover. Nevada Sunrise LLC acquired the property in 2000.
The property consists of 141 unpatented lode mining claims covering an area of approximately 2807 acres.
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Pilot Gold is led by the same management and technical teams that built Fronteer Gold, a strong growth company acquired by Newmont Mining Corporation for approximately $2.3 billion. In 10 years, Fronteer Gold grew from a $2-million venture shell into a well-funded, high profile, development-focused gold company. During this time, Fronteer Gold discovered or advanced seven deposits.
Exploration interest in eastern Nevada is currently elevated due to recent significant gold discoveries in the Pequop Mountains northwest of Kinsley Mountain, in similar Early Paleozoic-age carbonate stratigraphy.
First discovered in 1984, Kinsley went through a handful of owners before being bought for $3 million by Alta Gold in 1994. Alta Gold put the property into production in 1994. Between 1994 and 1999, the property produced over 138,000 ounces of gold, or roughly 30K ounces per year a fairly modest amount by eastern Nevada standards.
The mine was considered all but played out by the late 1990’s and closed with the gold crash of a decade ago but now with the price now hovering near the $2,000 an ounce mark and with geology very similar to the Pequops discovery it has sparked renewed interest.
Pilot Gold has agreed to acquire Animas’ interest in the Option Agreement for a cash payment of $350,000, representing Animas’ expenditures to date on the project, and a total of 150,000 common shares of Pilot Gold to be issued to Animas over a three year period.
Pilot Gold now has the right to earn a 51% interest in the Kinsley Mountain property by spending $1.5 million in exploration expenditures by March 30, 2013, of which approximately $316,000 has been spent to date. A joint venture will be formed when Pilot Gold has earned its 51% interest. Upon earning its initial interest, Pilot Gold may elect to spend a further $3 million in exploration expenditures to earn an additional 14% interest for a total interest of 65%. Pilot Gold also has the right to earn up to 75% interest by paying for and completing a Pre-feasibility Study.
During the option period, Pilot Gold will now be the operator for the Kinsley Mountain Project.
