Pinson Mine

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Franco-Nevada holds a 1-2% NSR royalty on approximately 20 sections and a smaller royalty on another half section of checkerboard land in the area covering portions of the Pinson and Getchell projects in Nevada.

The Pinson project is located near Winnemucca in Humboldt County, Nevada, just south of Barrick and Newmont’s Getchell/Turquoise Ridge mine and 8 miles from Newmont’s Twin Creeks mine complex. From 1980 to 1999, the Pinson mine produced 985 koz of gold through open pit mining and heap leach and oxide mill recovery.

In September 2011, Atna Resources Ltd. (“Atna”) announced that it had acquired Pinson Mining Company’s (a subsidiary of Barrick) 70% interest in the Pinson mine. The 70% interest includes four square miles of land (2,480 acres) which contains all areas of previous gold production as well as the area containing the current estimated mineral resources. As part of the transaction, Atna also signed a non-exclusive ore milling and gold purchase agreement allowing for processing of Pinson mine ores at Barrick’s Goldstrike processing facilities.

Atna reported that it plans to start commercial underground mine production in the fourth quarter 2012 and announced that a feasibility study to develop the open pit potential at Pinson will be conducted in the coming months as underground production ramps up.
Pinson is presently permitted for underground mining under a small miner’s permit. Atna has stated that applications will be made in the near future to administratively amend this permit to allow full scale underground operations. High-grade ore mined at Pinson will be transported to nearby third party plants for processing. Atna stated that additional permitting, which may require the completion of an environmental impact study, will be required to support open pit mining and heap leach recovery operations at Pinson.

Atna Resources acquired 100 percent of the Pinson mine in Humboldt County with the intent to begin underground mining operations within the next year, says Jim Hesketh, president and chief executive officer of the company headquartered at Golden, Colo.

Atna previously owned a 30 percent stake in the mine and acquired the remaining 70 percent from Barrick Gold Corp. for $15 million in cash and 15 million common shares of Atna stock. The company has arranged a $20 million credit agreement with Sprott Resource Lending Partnership of Canada to finance the monetary portion of the acquisition and expects to close on the acquisition in the next few weeks.

The Pinson mine is located on four square miles of land 30 miles northeast of Winnemucca along the Getchell gold trend.

Homestake Mining Corporation operated the Pinson mine as an open-pit facility and produced just shy of 1 million ounces of gold, but mining operations were shuttered in 2001 due to the low price of gold at the time. In 2004 Atna spent close to $14.5 million to acquire a stake in the mine, and Barrick, which merged with Homestake in 2002, has invested more than $30 million in the site, Hesketh says.

At today’s gold prices — in the $1,800s an ounce — re-opening the project is a winning financial proposition, Hesketh says. Studies conducted by the company indicate the property still might have more than 1 million ounces of gold to be recovered, but Atna wants to update those estimates. More than 4,000 feet of underground exploration work has been completed at the site, and a lot of underground infrastructure already is in place, Hesketh says. Atna plans on advancing engineering work, including a detailed mine design.

The company plans on producing gold from the mine in the next nine to 12 months, Hesketh says — however, much of that aggressive timeline depends on the company’s ability to secure a mining contractor and qualified labor to staff mining operations.

Hesketh says Atna is accepting resumes for engineers, geologists and underground miners.

“As soon as we can get a mining contractor available to put on site, we will start to initiate some of the driving of secondary access and activities permitted under the current permitting plan,” he says.

The Pinson mine represents a strategic acquisition for Atna, which also operates the Briggs gold mine in Inyo County adjacent to Death Valley, Calif. That mine employs about 135 people and is generating positive cash flow, Hesketh says. The California facility netted $2.7 million during the second quarter, boosting Atna to its first-ever quarterly profit of $1.1 million.

“Pinson will help expand our gold production and gives us a stronger operating profile as a company at a time when the price of gold is at historic highs,” he says.

Ore from the Pinson mine will be processed at Barrick’s Goldstrike processing facilities. Barrick will receive a 10 percent royalty on the mine’s profits after the first 120,000 ounces of gold are produced.


Referecne:

www.atna.com/s/Pinson.asp

google.brand.edgar-online.com/EFX_dll/EDGARpro.dll?Fetc...

www.newswire.ca/en/story/1001555/atna-provides-developm...