Lode-Star Mining Inc. plans to begin gold production from the company’s Goldfield Bonanza underground project near the historic town of Goldfield and truck the ore to the Nevada town of Manhattan for processing in a mill there.
“We’ve been the little engine that could,” said Mark Walmesley, the president, chief executive officer and chief financial officer of Lode-Star. “We’ve been rebuilding the underground since about 2015.”
He said mining could begin in the second quarter of this year, but “the moment we start mining, we have to do a secondary escapeway.” There is one shaft to the workings now, but federal regulations require a second way out of a producing mine.
In production, Goldfield Bonanza will be a small but high-grade mine. Miners use jackleg drills, not large equipment such as used in Nevada Gold Mines operations in Nevada.
“It’s all about high grades. We don’t want to process waste rock. We want to be diligent, agile and small,” Warmesley said in a telephone interview. “We want good use of capital all the way around.”
A January 2020 technical report on the Goldfield Bonanza project shows drill intercepts in 2011 that included 9.5 feet of gold averaging 40.8 ounces per ton, 4.5 feet averaging 51.46 ounces per ton and 9.5 feet averaging 26.8 ounces per ton.
The privately owned project in Esmeralda County is permitted through the Nevada Division of Environmental Protection for up to 10,000 tons of ore a year. The project is adjacent to the town of Goldfield, with claims going into the townsite. There are 460 patented acres, and there is a warehouse-office complex.
Warmesley said the project has had five full-time employees since 2015.
Plans call for storing mined ore underground until Lode-Star is ready to transport the ore to the mill at Scorpio Gold’s Goldwedge property. Lode-Star and Scorpio recently announced an agreement that calls for Lode-Star to advance funds for mill improvements that include adding a flotation circuit. Lode-Star will receive a lower fee for the toll milling in exchange.
“The gravity circuit was not enough. We have to add the flotation circuit for 80 to 85% recovery,” Warmesley said.
If there is still gold ore in the tailings after the milling, the tailings can be taken to Scorpio’s Mineral Ridge Mine in Esmeralda County for leaching, he said.
Historically, the Goldfield Mining District has produced roughly 4.2 million gold ounces and “some of the highest-grade gold ores ever mined in the United States,” according to a technical report on the project. The district was discovered in late 1902.
The report states that the Goldfield Bonanza site is the only large land position in the main mining district not controlled by Waterton Global Resource Management Inc., which is advancing the nearby Gemfield development project that would become an open-pit operation.
The underground mine Lode-Star is developing is in an area that has open pits from past mining, and the underground mine has been in production in years past.
Newmont Corp. was among those operating in the district. Newmont operated there from the late 1940s to early 1951.
The technical report states that important producing mines in the main district included the Mohawk, Combination, Florence, Jumbo, January and Red Top Mines. January is on Lode-Star property. The report also cites as an example of the richness of the ore that one lease on the Mohawk claim brought $5 million from ore averaging $400 a ton in 1909.
“At the prevailing price of gold of $20.67 per ounce, five million dollars equates to approximately 258,400 ounces and four hundred dollars a ton equates to 19.35 ounces per ton of gold,” reads the report by geologist Robert Hatch.
Currently, Lode-Star, a publicly traded company, is the operator of the Goldfield Bonanza project and 20% owner.
The Goldfield Bonanza property is subject, however, to an option agreement between Lode-Star Mining and Lode Star Gold Inc., a private corporation that owns the patented claims. Lode-Star has the option to acquire an 80% interest in Goldfield Bonanza after completing commitments that include payment of 35 million shares of stock and $10 million in pre-production royalties, according to the report.
Lode Star Gold was formed after R.H. Lawe & Associates acquired the Margraf property. Lode Star did exploration from 1999 through 2010, according to the report, including reconditioning of the February Premier Shaft.
Lode Star spent nearly $7 million on underground work, the technical report says.
ICN Resources Inc. completed an option agreement with Lode Star Gold in 2011 and did more exploration. Corazon Gold acquired ICN in 2012 and relinquished the property in 2013. Lode Star Gold then started geological modeling of the high-grade gold zones, the report states.
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