How big is the Basin Gulch gold project in Montana?
Actually, it could turn out to be one of the biggest around.
Back in the 1990s, when work there was undertaken in earnest, various estimates put the resource base there at between 3.5mln and 4.5mln ounces, and counting.
Much of that was near surface, much of it was in oxides, and the grades were plenty good too.
So, why then has Basin Gulch never been mined?
It got close, once, when Kinross put in an offer for the project back in 1996.
But within weeks the authorities in Montana had voted in a cyanide ban, and Basin Gulch was sidelined as too difficult. Seasoned investors will recall too, that back in those days the gold price was a shadow of what it is now.
But times changes, even if geology doesn’t.
The political outlook in Montana has shifted, and the gold price is higher too.
The time has come to revisit Basin Gulch with intent.
First things first, that cyanide ban.
Montana, having come down hard on the oil industry, has in recent years been slipping down the prosperity tables. From relative affluence, it now finds itself the second poorest state in the USA.
At the same time, Montanans look across the border to Idaho, where the attitude to mining is very receptive, and the industry is contributing significantly to state coffers. Could Montana benefit from such a shot in the arm too?
The answer is that if it green lights projects like Basin Gulch it sure could. And there are plenty of signs that at the state level things will move that way pretty rapidly. But even if they don’t, advances in modern processing techniques mean that it would still be possible to mine Basin Gulch to produce a concentrate.
This could then be trucked over the border to Idaho for full blown processing into gold. With spot at close to US$2,000 that sort of option looks economic in a way that was just unthinkable back in the late 1990s, when gold was headed towards less than US$300.
The team at Lannister Mining Corp - seasoned mining industry professionals all - have a clear-eyed view of how all this can be put together.
The plan is to undertake a rapid drilling campaign that will wrap modern-day NI43-101 numbers around that historic resource.
Precisely what initial number will be generated remains an open question, but on the strength of what’s already known about the property it’s likely to be no less than two million ounces. But given that Basin Gulch remains open at depth, and has never been subject to anything other than shallow drilling, the potential for additional ounces is huge.
“I think the grade will improve to between 1.5 and two grams per tonne,” says Tom Martin, Lannister’s President, and one of the architects of the deal that brought Basin Gulch and Lannister together.
“Previously, the high grade was discounted. But it was hit at a depth of 210 metres, and we will be going much deeper. We have magnetics and geophysics that show multiple targets begin at 180 metres and go down to 300 metres.
And it’s not just at depth that more ounces might come in.
“We’ve re-staked all the original claim block,” says Martin, “and we think it goes out east-west.”
The discoverer of Basin Gulch will be acting as a consultant to the company as drilling gets underway, and if anyone knows how to replicate the old historical work it will be him.
So, plenty to do then.