Phoenix Gold Starts Drilling Next to Newmont's Phoenix Fortitude 300,000 oz. Per Year Mine
Vancouver, BC / July 14, 2014 / On July 11, 2014, Market Vectors Junior Gold Miners (GDXJ-NYSE) increased 4% to $45.53. The ETF, which is a proxy for the junior gold mining sector, has risen 28% in 60 days.
With the gold markets rebounding, risk-averse investors are gravitating to junior explorers with low political risk, near-surface assets and aggressive drill programs close to existing mines.
This is exactly where Phoenix Gold (PXA-TSX.V) a Canadian junior exploration company plans to start drilling its Plumas Property in Nevada's Battle Mountain District, immediately adjacent to Newmont's (NEM-NYSE), Phoenix-Fortitude 300,000 oz per year Gold/Copper Mine.
PXA President and CEO Glenn Laing is an investment banker who has raised $1 billion in capital markets. Together with Explorationsist Don McDowell -- an established country and western singer and landman -- Phoenix Gold acquired its Battle Mountain claim blocks from old ranching families who refused to do business with big mining corporations.
It is unusual for a junior explorer to gain control of mineralized claim blocks a stone's throw from an existing mine. This is the Phoenix Gold opportunity -- the Phoenix-Fortitude mine will benefit from high grade mineralization to add to its current low grade mining operations.
On July 7, 2014, PXA announced that it has completed the detailed mapping and prospecting program. Interpretation of the geology and structural controls has led to the identification of six drill sites on the Plumas Property.
"The Plumas target has been in the hands of cattle ranchers for generations," confirms Laing in an exclusive interview with Financial Press, "so despite the fact that it is adjacent to a massive producing gold mine, it is has never been drilled."
"We are rolling out that strategy now," stated Laing, "The Plumas gold target is our first area of focus. We've done all the necessary mapping prospecting and chemical work. We will start drilling this week."
The only mining activity associated with the Plumas claim is a shallow shaft and some underground workings that was dug between 1938 and 1940. With picks, shovels and a donkey a small operation mined quarter ounce to half ounce of gold per ton until they were shut down due to WW11 restrictions.
"Junior exploration stocks are driven by news," stated Laing, "and we are just entering an extended period of news flow. We expect to be drilling the week of July 14th, 2014. And thereafter that we will release the assay results from each hole, the whole process taking eight to ten weeks. We expect to have a resource estimate for Plumas in September, 2014."
PXA has awarded the 8-hole 1,000 meter drill contract to Redcor Drilling Inc. of Winnemucca, Nevada for the Plumas Property.
The Plumas Property is an outcropping high grade gold mineralized zone located within two patented claims covering a total area of 40 acres with extralateral rights and one mill site claim.
"Plumas is a 2-claim block, about 1,000 meters long, by 200 meters wide," stated Laing, "you can build a decent sized open pit mine on that footprint. Following the recent mapping and prospecting exercise , we increased the number of drill holes so that we get the coverage over the entire strike length of the potential mineralization."
The science and the history of this area suggest the high grade material is close to surface. The Phoenix-Fortitude mine had economic grades of gold right from surface outcrops. PXA is drilling into surface outcrops on the Plumas claim.
Newmont's Phoenix-Fortitude Mine and Phoenix Gold claims lie in the heart of the Battle Mountain–Eureka Trend which features High-Grade Structural Gold-Silver Deposits and Gold-Copper-Moly Porphyry Systems.
"We are confident that we will grow a 43-101 gold resource which could significantly raise the valuation of our company," stated Laing.
Historic gold production from Nevada (1835-2013) totals about 153 million ounces. As well as Newmont, Goldcorp (GG-NYSE) and Barrick Gold (ABX-NYSE) operate profitable gold mines in the state.
Amid economic turmoil in Europe, the civil war in Iraq, unrest in Syria and Israel and the weakening of the US Dollar, The Arca Gold Bugs Index (HUI-NYSE) has climbed 21% year to date.
The price of bullion is diverging sharply from base commodities suggesting it is regaining its status as a safe haven investment. Typically, in this next phase, the well-run junior explorers experience the most dramatic share price appreciation.
Phoenix Gold is currently trading at approximately $0.05 with a market cap of $1.7 million and 31 million shares outstanding. Insiders and management control approximately 50% of the company.
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SOURCE: Financial Press
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