Engineering & Mining Journal

FEB 2019

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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GREAT BASIN DEVELOPMENT 42 E&MJ • FEBRUARY 2019 www.e-mj.com Metal prices aside, the investment cli- mate for mining has improved in the U.S. during the last two years. Nowhere is this more visible than the Great Basin, a region that encompasses Nevada, western Utah, southern Idaho and the eastern edge of California. Today, the polymetallic deposits in the Walker Lane district are attracting re- newed attention and Nevada mining towns, such as Yerington and Beatty, are seeing more mining-related investment and jobs. One of the sessions at the recent Amer- ican Exploration & Mining Association (AEMA) meeting, which took place in Spo- kane during December, discussed the cur- rent situation. The theme of the session was "Growth Companies: Has Growth Replaced Survival?" Granted, most miners are overly optimistic when it comes to development plans, but those who listened to the presen- tations would agree that growth has in fact replaced the survival-mode mentality. The three presenters who had produc- ing mines or developments projects un- der construction — Gold Resource Corp., Nevada Copper Corp. and Premier Gold Mines Ltd. — had a lot in common. They have assembled respectable land packag- es in a mining-friendly jurisdiction. They have experience, commitment and a dis- ciplined approach to capital deployment. The Isabella Pearl Mine Opens in Nevada In his presentation, "It's Not Every Day You Get to Open a Mine," Barry Devlin, vice president of exploration, Gold Re- source Corp., discussed the company's newest mine, the Isabella Pearl project, located in Nevada's Walker Lane District. Gold Resource was founded by Bill and David Reid, who had previously founded U.S. Gold and then sold it to Rob McEwen. They then acquired the Aguila project in Oaxaca, Mexico, and discov- ered the nearby Arista project. Gold Re- source began commercial production in 2010. Today, the company is led by Bill Reid's son, Jason Reid. Headquartered in Colorado Springs, Colorado, Gold Resource has established itself as a low-cost gold, silver and base metal producer with mines in Mexico and more recently, Nevada. It is listed only on the New York Stock Exchange and offers a unique program where shareholders can convert their monthly cash dividend into gold or silver. The company's seventh consecutive year of profitability occurred in 2017 and Gold Resource plans to dou- ble gold production by leveraging new op- erations in Nevada. "Looking at the most recent downturn, Gold Resource has not only survived, but it has thrived," Devlin said. "The compa- ny has paid more than $111 million back to shareholders in monthly dividends and it acquired some strategic assets that have greatly improved its growth profile." The company dismisses growth for growth's sake, Devlin explained. "So many companies seek growth and then they load themselves with burdensome debt and maintain an unhealthy bal - ance sheet," Devlin said. "We have a return-on-capital approach. A portion of the company's cash flow goes toward div- idends. We have just 57 million shares outstanding. We have had seven years of organic growth since the company's Au- gust 2010 capital raise." The Walker Lane district, which runs along the California- Nevada border has attracted more attention recently. Gold Resource Corp. is building a processing facility at its Isabella Pearl mine, which includes an ADR plant for pouring gold doré on site. GREAT BASIN DEVELOPMENT By Steve Fiscor, Editor More development projects move toward production in Nevada in the Great Basin Growth Supplants Survival

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