It may be hard to remember now, but there was a time not so long ago when the gold price was so low that perfectly good mines were shut down because they simply were not economic.
Today, with gold holding steady above US$1,800, companies with formerly producing mines are working hard to get shuttered operations back up and running – and with modern exploration methods opening up new vein systems, there’s a lot of blue sky potential.
Casa Minerals Inc (TSX-V:CASA, OTC:CASXF) is focused on the Congress gold mine in Arizona, which was shuttered in 1992. “The price of gold was really low and the major mining company working on the project couldn’t pay the NSR, so it went into receivership, and they shut it down,” Casa CEO Farshad Shirvani told Proactive. “It was still profitable at $200 or $300 gold.”
READ: Casa Minerals starts drill program at Congress gold mine for the first time after 30 years
Congress has a long and storied history. Located in the Martinez mining district of Yavapai County, Arizona, the property consists of 14 patented mineral properties covering around 260 acres. Beginning in the late 1880s, the Congress mine operated on and off and at one time supported a full-scale mining and milling operation. It has the distinction of being Arizona’s largest gold-silver mine with production of about 500,000 ounces of gold.
Casa acquired Congress in a package deal along with another copper-gold property in northern British Columbia that took about 18 months to close. Casa now owns 90% of Congress and its former producing gold mine.
The plan is to collect data on the vein system, which was only looked at in the 1990s. “It’s really outdated,” Shirvani said. “We needed fresh GPS data to look at two of the stopes.”
One stope was outlined by the previous operator, and the other has been backfilled. Casa is hoping to examine the two stopes and start drilling soon.
An additional porphyry target on the property looks promising as well. An initial sample revealed copper, gold and silver, and other minerals in the porphyry. Shirvani said it could become a “very, very large system.”
DEEP DIVE: Casa Minerals is targeting precious and base metals prospects advanced to semi-advanced quality
What’s great about Congress is that Casa doesn’t need permits to drill – it’s on patented ground. “All we need to do is to take the water truck there and get to work,” the CEO said.
This will be the first drill program on the Congress property since the mine was shuttered in the 90s. “It’s a historic moment for the mine and in Arizona. The mine was very famous in the state, and locals are very excited. People are really excited that this project is opening up again and that it will bring more work to the area.”
Casa couldn’t have picked a better contractor for the program in Godbe Drilling – the father of the current drill manager was involved in the last drilling campaign at Congress. “He’s excited to go back and drill it again,” Shirvani said. “They are from the area and know the project really well.”
When the time comes to permit for further drilling, the process in Arizona is relatively painless. Permitting with the BLM costs around US$150 and in a few days the company receives its permits.
Casa is also backed by strong shareholder support. Around 40% of its shares are held by one institution. “We can get funding anytime we want, but currently we are really well-funded for our program,” said Shirvani.
The CEO is confident that the historical data will hold up once drill results start coming in from the current program at Congress.
“I want to drill it all the way,” Shirvani said. “This is not NI 43-101 compliant yet. There’s an outline on old map with scribbles showing 400,000 ounces on one side and 500,000 ounces on the other side. I just want to show that we have that amount of gold.”
So far, the maps are correct on one item. “Every time they said they hit the gold vein, there are (actually) several gold veins in there,” Shirvani concluded. “They were telling the truth. Now we have to see how the resource calculation looks.”
Contact Angela at angela@proactiveinvestors.com
Follow her on Twitter @AHarmantas