September 9, 2009
Cortez Gold Corp. (TSXV: CUT.P)
Experienced Team of 'Elephant Finders' Now Targets Drilling of Exceptional Gold Projects in the Key Nevada Gold Belts.
Cortez Team Scores Coup in Acquiring Select Portfolio of 22 Gold Projects in Nevada from Seabridge, Vaulting Company to Prime Explorer Status. Property Acquisition to be Completed Sept. 30, 2009.
• Bill Sheriff (Golden Predator, EMC), William Threlkeld (Seabridge, Placer Dome) and financier-promoter Robert Eadie (Golden Predator, Starcore) join forces at Cortez to address singular potentials of exciting gold project portfolio.
• Planned 4Q drilling by Cortez includes Four-Mile Basin Gold Project (targeting 10-mil. oz., both vein and disseminated gold targets) and Castle-Black Rock (NI43-101-compliant M&I resource of 214,990 oz. gold, plus inferred resource of 93,310 oz., with multiple mineralized gold targets).
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Here's an Early-Bird Alert calling attention to a potentially very significant new gold play in the making by Cortez Gold Corp. (TSXV: CUT.P). As already announced, the company plans to complete the acquisition of 22 significant gold properties in the prime Nevada gold belts from Seabridge Gold Inc. by September 30, the end of this month.
Now already trading in the public markets, Cortez is currently designated as a capital pool company under Canadian regulations. The planned acquisition of the extensive gold project portfolio constitutes the company's qualifying transaction, thereby potentially vaulting Cortez into the role of a leading Nevada gold explorer virtually overnight. Cortez management anticipates no difficulties in achieving a timely closing of this transaction.
We see Cortez as an attractive proposition for sophisticated, risk-tolerant investors in advance of the closing on the attractive gold project portfolio.
The gold projects are being acquired from Seabridge Gold Inc. (NYSE-AMEX: SA, TSX: SEA, $30/share, $1.16 billion market cap). Seabridge, among other things, also controls the KSM project in British Columbia, one of the five largest undeveloped gold projects in the world with NI 43-101-qualified measured and indicated resources of 34.5 mil. oz. gold and 8.5 billion pounds of copper in-situ.
A big plus for Cortez in acquiring the extensive Nevada gold project package from Seabridge is that William Threlkeld is joining the board of directors. Mr. Threlkeld, as SVP of Seabridge and earlier as VP-Exploration with Placer Dome, has earned a legendary respect in the North American geological community for finding, acquiring and developing Seabridge's KSM project, as well as, while with Placer Dome: Las Cristinas in Venezuela (9.3 mil. oz. gold), Cerro Crucitas in Costa Rica (2.3 mil. oz. gold) and Mulatos in Mexico (2.0 mil. oz. gold).
Also joining Threlkeld on the Cortez board is Bill Sheriff. Sheriff, earlier the co-founder and chairman of Energy Metals Corp. – which was acquired by Uranium One in 2007 for C$1.8 billion – is today the chairman of Golden Predator Royalty & Development Corp., and the president of Seabridge's subsidiary, Pacific Intermountain Gold Corp., which holds the Nevada gold properties that Cortez is acquiring.
Sheriff and Threlkeld, singly or together, were responsible for making all of the gold project selections by Seabridge. They have studied and explored these properties extensively and make the ideal geological team for Cortez. Both have had to wait a long time to continue the exploration and to drill these properties – since the time Seabridge gained control of them in 2000-02, and, for Sheriff, from well before 2002, when he was accumulating these properties in Platoro West Inc., a private company.Rounding out key management, Robert Eadie is the president of Cortez, a recognized financier and promoter, the president of Starcore International Mines Ltd. – a gold-producing company with an operating gold mine in Mexico – and the president of Golden Predator Royalty & Development Corp. Combined, Eadie and Sheriff have raised more than $200 million for exploration and development projects.
Location, Location, Location
First, yes, Cortez is gaining 100% control of 22 gold properties, all located in Nevada, where 82% of the gold that is mined in the U.S. is located. The U.S. is the world’s #2 gold producer, behind China, with marginally larger production annually than South Africa and Australia, with most recently, 234 metric tonnes of gold (+8.2 million oz.) produced in 2008. Nevada supplies more than 6% of the world’s gold each year.
According to management, Nevada is the best gold mining jurisdiction in the world due to its abundance of gold, its geology, infrastructure, permitting, the low cost to explore and mine and the depreciating currency.
Geologists emphasize that much more gold is there to be found, but many of the best properties have been locked up waiting for the right situation. In the case of Seabridge, the company today has all it can handle with its massive KSM project, and its major Nevada gold portfolio has simply needed the right combination of people and money to come forward, as is occurring finally today in Cortez.
Walker Lane Gold Belt
Second, a high proportion of the gold property portfolio being acquired by Cortez – including the first four that are targeted for drilling by the company – are located in the Walker Lane Gold Belt in southwestern Nevada. The Walker Lane Gold Belt offers an exceptional opportunity because it has had far less exploration than the better known Carlin Trend and Battle Mountain-Eureka Trend.
The Walker Lane Gold Belt hosts large gold mining districts (Round Mountain, +10 mil. oz. produced; Goldfields District, +5 mil. oz. produced; Bullfrog, +2.4 mil. oz. produced; among others). The Walker Lane is a major geological trough running northwest-southeast, generally paralleling the California-Nevada border. It is the boundary between the Great Basin province and the Sierra Nevada, characterized by northwest-striking faults, major conduits for mineralizing fluids.
The current view among geologists is that the Walker Lane takes up at least 25% of the boundary motion between the Pacific Plate and the North American Plate, with the other 75% taken up by the San Andreas Fault system to the west.
For a map of the Walker Lane Gold Belt with the locations of the large gold deposits and Cortez's first four gold projects, click through here.
Third, it's key to understand that, of the 22 properties, two projects are the most exciting, and have had substantial exploration in prior decades. These two projects – Four-Mile Basin and Castle-Black Rock – have defined drill targets, will be the first to be drilled and could be a key to the early success of Cortez.
Four-Mile Basin Gold Project
Seabridge gained control of Four-Mile Basin in 2002 from Bill Sheriff's private company, Platoro West Inc. SEA explored the project area – including mapping, geochemical sampling and a summary of prior exploration – in 2005. Threlkeld was responsible for the work-ups performed – which concluded that drilling should start immediately – and has had to wait until now to finally get the drills turning here.
The project area overlies a large, gold-bearing hydrothermal system. The age of the mineralizing events has been dated at between 25-1/2 and 33 million years ago, corresponding with other major deposits in the Walker Lane Trend, including both Round Mountain and Goldfields, according to Threlkeld, based on the studies performed in 2005. Prior drillers, seeking Round Mountain-style disseminated gold structures, did not drill deep enough to get to the main zones of gold, according to Threlkeld, which could well lie some 100 – 200 meters deeper in the range of 250 – 300 meters depth.
Four-Mile Basin is permitted for drilling, and Cortez plans to perform approximately 3,200 meters of drilling in the 4Q to test the exploration conclusions to date. If the structure is continuous and mineralized, as it appears from exploration thus far, the potential exists for some +10 million oz. of gold within the property.
The project consists of 2,420 acres approximately 40 miles northeast of Tonopah in Nye County in the Walker Lane Gold Belt. It is within 20 miles of Kinross/Barrick's Round Mountain Gold Mine, which has produced more than 10 million ounces of gold since 1906, and which is still producing +200,000 oz./year with proven and probable reserves of 1.621 million oz. and measured and indicated resources of 529,000 oz. Round Mountain is an open-pit, low-grade (0.60 – 0.65 g/t) disseminated gold deposit that averages all-in costs of production of approx. $500/oz.
Four-Mile Basin is also within 40 miles of the 4-mil.-oz. Goldfields Gold Mine, a high-grade epithermal vein structure. Based on the thorough work-up performed by Threlkeld and the Seabridge exploration team in 2005, Cortez management is targeting both types of mineralization – both bulk tonnage, low-grade gold and high-grade, vein-style gold – at Four-Mile Basin.
Castle-Black Rock Gold Project
The Castle-Black Rock Gold Project consists of +3,000 acres located 20 miles west of Tonopah in the Walker Lane Gold belt. The project area includes 3 mineralized zones – Castle, Berg-Boss and Black Rock – which have received more than 26,000 feet of drilling (283 holes) performed by Kennecott, and which may be connected at depth.
In the year 2000, Seabridge had an NI 43-101-compliant resource estimate prepared by Bikerman Engineering & Technology Associates Inc. (BETA) based in Connecticut, based on drilling information provided by Platoro West. Messrs. Threlkeld and Sheriff coordinated at that time to get the resource estimate prepared.
The current resource – based on information from 139 of the drill holes – consists of measured and inferred resources of 12.4 million tonnes grading 0.54 g/t totaling 214,990 oz. of gold, plus inferred resources of 7.95 million tonnes grading 0.37 g/t totaling 93,310 oz., with a cut-off grade of 0.25 g/t. (Compare with resource grades at Round Mountain above.) Most of the defined gold is in the Castle Zone at open-pittable depths.
Several characteristics of the project have compelled Cortez management to place a high priority on getting drill rigs back out to Castle-Black Rock for more drilling, now planned for the 4Q, this year assuming permitting approvals are obtained on a timely basis, as is anticipated. Messrs. Threlkeld and Sheriff have been waiting for nine years to execute this plan.
• Cortez management believes the gold potential at Castle-Black Rock could be in the range of 1.5 mil. oz. gold.
• Cortez is targeting extensions of the open-pittable material with possible connections between the Berg and Boss Zones and between the Berg-Boss Zones and the Black Rock Zone along identified structural corridors, to expand the size of the resource.
• Past work did not close the Castle Zone along strike or at depth. Expanding this target has the potential to link the Castle Zone with the Black Rock Zone, expanding the size of the resource.
• Feeder structures need definition, potentially identifying the gold source.
• There were abundant drill intercepts outside of the resource area that need follow-up. An additional high-grade target in the northwest area of the property needs to be drilled where Kennecott identified two parallel bonanza-style veins. This area is open along strike and to depth.
Liberty Springs Gold Project
While Cortez targets immediate drilling programs at its Four-Mile Basin and Castle-Black Rock gold projects starting this fall, two additional projects within the Walker Lane Gold Belt also demand near-term drilling, nominally targeted by management for 2Q, 2010. These projects – Liberty Springs and Golden Arrow South – are also seen as highly gold-prospective, with drilling targets already planned.
The Liberty Springs Gold Project is adjacent to the Midway gold deposit (current inferred resource of 215,000 oz. gold grading 1.34 g/t), which is adjacent to General Moly's Liberty Molybdenum Project (earlier known as the Hall-Tonopah Moly Project), which is going into production. The project area is approx. 30 miles north of Tonopah in the vicinity of Round Mountain
At Liberty Springs, previous widespread drilling by Pegasus intercepted encouraging gold values when epithermal veins were cut. Prominent banded epithermal veins demonstrate high gold values at surface. Pegasus was targeting a bulk-tonnage, low-grade deposit, and did not drill the best targets for high-grade vein systems.
Golden Arrow South Gold Project
Both Golden Arrow and Golden Arrow South were prospected in the late 1980s and early 1990s, when companies were targeting bulk-mining disseminated gold resources as was the case with the other projects in Cortez's portfolio.
In the southwestern area of Golden Arrow South, Seabridge's exploration team found several small mines and no strong indication of significant exploration work. A zone of well-developed silicic alteration was identified, where rock samples were collected with gold concentrations up to 9.95 g/t gold and 246.9 g/t silver. Auger sampling was completed over the zone with soil sampling completed on the strike projection of the alteration zone.
A primary target zone is defined by alteration and geochemistry with an area of approx. 1,200 meters by 700 meters. A secondary zone of 2,000 meters by 500 meters to the north of the primary target has been identified and requires closer exploration to define drilling targets.
Seabridge originally staked the Golden Arrow South project in 2001, approx. 4,600 acres, as the extension to the south of the Golden Arrow gold district (Gold Coin resource, Hidden Hill resource) approx. 30 miles east of Tonopah in the Walker Lane Gold Belt. In 2005, the company performed field examinations, geological mapping, geochemical sampling, including rock and soil samples, and collected and validated historical data. Targets were identified for drilling.
Cortez is targeting the second quarter, 2010, to get drill rigs on the property for first drilling, having set a loose target of initial potential in the range of 1 mil. oz. gold.
A Rich Pipeline of Nevada Gold Projects
Cortez is also targeting specific exploration work to identify drilling targets on an additional six gold projects in the package being acquired from Seabridge in gold belts in Nevada: Hannapah-Thunder Mountain, Merger-Bellehellen, Eden District, Ellendale District, Gilbert South and Teton.
...While Other Projects Are Targeted for Joint Venture or Sale
In analyzing and prioritizing the Seabridge gold project portfolio coming into the company, Cortez management has also nominally designated 12 gold properties for prospective joint ventures or for possible outright sale. These properties are: Kings River, Mt. Wilson, Maverick Springs, Warm Springs, Indian, Clayton Ridge, Stonewall, Rays, Clifford, Aron, Westgate and Baxter Springs.
All-in-all, it is safe to say Cortez is gaining control of one of the most exciting portfolios of Nevada gold belt-based projects among all Nevada-based gold exploration companies. And it's a definite plus that this portfolio is coming into the company together with the considerable exploration expertise of William Threlkeld and Bill Sheriff who earlier guided the acquisition and exploration of the same projects.
The Management Team
Robert Eadie, President – Mr. Eadie, over the past 15 years, has been actively involved in public resource companies, having raised over $80 million for exploration, development and mining projects around the world. He has been the catalyst behind several successful resource companies. He is president and CEO of Golden Predator Royalty & Development Corp., Starcore International Mines Ltd., Highland Resources Inc., Cortez Gold Corp. and Parlane Resource Corp, and serves as a director of American Consolidated Minerals Corp. He earlier served as the executive vice president of Klondex Mines Ltd.
William M. Sheriff, B. Sc.–Geology, Director-Designate – A crack geologist, Mr. Sheriff has over 30 years experience in the mineral exploration and development business. He is the chairman of Golden Predator Royalty & Development Corp., EMC Metals Corp., Starcore International Mines Ltd. and American Consolidated Minerals Corp. He is a director of Western Lithium Corporation, Artha Resources Corporation and Platoro West Holdings Inc.
Mr. Sheriff co-founded and served as chairman of Energy Metals Corporation, which was acquired by Uranium One for $1.8 billion in 2007. He earlier served on the board of directors of Evolving Gold Corp., Quincy Gold Corp., Midway Gold Corp., Eurasian Minerals Inc. and Uranium One Inc.
As the founder and past-president of Platoro West Inc., a private company, Mr. Sheriff is acknowledged to be a leading precious metals prospect developer in the western U.S. In addition, he amassed the largest uranium resource package in the U.S., much of which became the assets of Energy Metals Corporation. He has compiled and owns one of the world's largest privately held mining databases. He has raised more than $125 million for mining projects.
William E. Threlkeld, M.Sc.–Economic Geology, Director-Designate – Mr. Threlkeld is acknowledged as one of North America's outstanding geologists. He began his career at Noranda Exploration Inc., and achieved his early recognition at Placer Dome Inc. From 1991 to 1997, as exploration manager and vice-president, he was responsible for all of Placer Dome's exploration activity and investment in Latin America. Mr. Threlkeld directed programs that resulted in the discovery and delineation of Las Cristinas, Venezuela (9.7 mil. oz.), Cerro Crucitas, Costa Rica (2.3 mil. oz.) and Mulatos, Mexico (2.0 mil. oz.). From 1997 to 2000, he was vice-president, exploration, for Greenstone Resources Ltd, responsible for resource delineation of three Central American gold deposits. He has served as senior vice president for Seabridge Gold since that time.
Gary Arca, CA, Director, Chief Financial Officer – Mr. Arca has extensive experience dealing with public companies and start-ups, both as a manager and consultant. He has served as a director of several publicly listed resource companies. He is a director and chief financial officer of Golden Predator Royalty & Development Corp., Starcore International Mines Ltd., American Consolidated Minerals Corp, Highland Resources Inc., and Parlane Resource Corp. He was a partner with two public accounting firms from 1996 to 2005, managing various audit, tax and consulting projects for public and private companies.
Success in the gold exploration and development business is often determined by the quality of the company's key management group, and this is why discerning investors will often look to the credentials and track record of the key players in a new company coming to market as a prime indicator of its potentials for market success. This is why Cortez Gold Corp. has quickly gained attention in the markets after announcing both the company's key management personnel and its plans for the acquisition of the exciting Seabridge gold project portfolio in Nevada.
Given the prior success record of the Cortez team – and also adding in the major plus that Messrs. Sheriff and Threlkeld have the significant advantage of already having nurtured and guided the progress of the gold project package coming into the company for over a decade – we see an exciting near-term future for Cortez quickly coming to the fore as the company completes the acquisition of its project package and commences exploration drilling programs shortly thereafter. The Eadie-Sheriff-Threlkeld team has ample financing resources and obviously sees no challenges in achieving any required company financings for the acquisition, exploration and development of its project portfolio.
Sophisticated, risk-tolerant investors looking for potentially attractive new gold plays might start tracking Cortez Gold Corp., and keep an eye peeled for news from this company. Email firstname.lastname@example.org or call
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