Nevada has produced over 225 Moz of gold but more than half of the state's bedrock is covered beneath valley basins. These covered areas have seen limited exploration to date because conventional exploration methods are challenging in covered terranes. Opening up Nevada's covered basins for exploration offers the potential to discover the second half of the state's prolific gold endowment.
Nevada Exploration Inc. has a unique tool at its disposal for gold exploration and is seeking large new Carlin-type gold deposits in Nevada's underexplored covered valley basins by incorporating hydrogeochemistry (groundwater chemistry).
Nevada Exploration is an early leader in incorporating this new technology to systematically identify, and advance, new exploration projects in covered terranes. The company presented at Mines and Money in London to explain the latest in under-cover exploration technology.
Mining Beacon spoke with the company's president, James Buskard, to ask him to describe the new technology.
James Buskard (JB): Hydrogeochemistry is an important new exploration tool that can provide valuable geological information in covered settings that allows us to respond directly to gold in groundwater as a pathfinder, and Nevada's covered valleys are an obvious new search area for a systematic, regional-scale, generative exploration programme.
While government and industry have begun working together to develop and apply hydrogeochemistry exploration methodologies in other parts of the world, most notably in Australia, Nevada Exploration is the first group to capitalise on the opportunity to apply hydrogeochemistry to discover large new Carlin-type gold deposits in Nevada's covered valleys. We are supported in this endeavour by a strong management team, which has been involved in many important discoveries in Nevada, including Lone Tree and Twin Creeks.
Mining Beacon (MB): What is your experience in this technique?
JB: I came from the environmental science side of industry, where we use hydrogeochemistry to characterise pit lake and surface water chemistry around known-deposits, traditionally for regulatory compliance purposes. Learning about their new approach to using hydrogeochemistry to find new deposits, I joined the Nevada Exploration team in 2004 and helped to complete the first systemtic hydrogeochemistry survey of Nevada specifically for gold exploration, which today has become the world's largest hydrogeochemistry exploration programme.
MB: And how did Nevada Exploration become involved?
JB: In the late 1990s, understanding that discovery rates in Nevada were beginning to fall and that the future of mining in the state depended on finding new exploration methods to systematically explore the bedrock beneath Nevada's large valleys, the US Geological Survey completed hydrogeochemistry characterisation studies at several large gold deposits in the state, such as Lone Tree and Getchell. The results of their work clearly demonstrated that these large known deposits were surrounded by halos of elevated gold and other related pathfinder elements in the groundwater and proved that hydrogeochemistry could be a powerful exploration tool to vector towards gold mineralisation in covered bedrock settings. Understanding the potential to find additional large Carlin-style deposits in Nevada's covered valleys, we are the first group to overcome the challenges of completing the large sampling programmes needed to leverage this new exploration tool and to integrate it with conventional exploration methods to systematically generate new gold exploration projects in Nevada.
MB: Is Nevada Exploration's exploration initiative unique?
JB: No, not in terms of the use of hydrogeochemistry in general — it is being used around the world for copper and base metal exploration by some of the world's largest mining companies (such as Rio Tinto and First Quantum). However, Nevada Exploration is the only company that we know of using it at such a large scale to search for gold, where the need for ultra-trace detection limits and specialized sampling technology provides a steep learning curve, so the barrier to entry is quite high.
MB: What are your next steps?
JB: Having now completed a state-wide generative groundwater sampling programme, analogous to the famous indicator mineral sampling programs responsible for the diamond discoveries in northern Canada, we are now advancing a portfolio of new exploration projects, all of which were generated based on our hydrogeochemistry exploration programme. The next steps for Nevada Exploration are to now advance these targets, much like conventional exploration projects, marching them towards conventional deeper drilling programmes.
MB: Have any initial holes been drilled?
JB: Yes, we are drilling right now at our South Grass Valley project (shown in the article photo), located 50 km south-southwest of Barrick Gold Corp.'s Cortez complex.
MB: What is the objective of this drilling?
JB: We are spending about US$1 million on six holes to confirm whether the enriched gold and pathfinder-element geochemistry in groundwater at the project is associated with a hydrothermal system of a scale consistent with those responsible for Nevada's large deposits, such as Cortez Hills at the north end of the valley. We have announced some of the results from the early drill holes. Everything is looking great, we are into shallow, intensely-altered, lower-plate, carbonate bedrock, just as we had expected, and drilling continues, so we're very excited about this programme.
MB: Turning to the exploration sector more generally, what are your views on the current state of the sector?
JB: As an industry, we need to get back to creating value. Over the past decade, for every dollar spent on exploration we are finding assets worth less than half a dollar! To be sustainable, we need to get better at identifying new Tier 1 targets if exploration is ever going to become an attractive investment for the retail market again. The best analogy for what we must become is the oil sector, which has a circa 60% success rate in its exploration drilling.
MB: Is there a solution?
JB: The oil industry moved offshore when onshore discoveries became too difficult. When the discovery curve flattens out in any industry, it needs to reimagine its target. New technologies need to be brought to bear, which is what Nevada Exploration is doing.
MB: So, what opportunities do you see over the next 12 months? How is your company positioned to take advantage of them?
JB: The opportunity, which is hard to overstate, is to open up new search spaces where we haven't yet been able to look. This will require new tools, technologies and expertise, and that is where we have positioned Nevada Exploration to be a leader in the industry.
MB: What sets your mining company apart from others in the space?
JB: There are no others in this particular space; we are using new tools to look under cover in the world's densest gold-producing region.
MB: In a sentence, what do you think makes your company such a compelling investment?
JB: We built a new exploration workflow to open up the half of Nevada that has never been looked at, and compared with our peers, success with one drill hole will underpin not just a discovery at one project but validate our entire portfolio of projects that have been developed the same way.
MB: Thank you.
As the petroleum industry had to transition from onshore to offshore exploration, the future of gold exploration is in covered bedrocks. Hope you enjoyed this interview with Nevada Exploration to explain how hydrogeochemistry can identify drill targets deep under gravel.
Chris Hinde
Chief Commentator, Mining Beacon
Previously editorial director of Mining Journal, and more recently head of S&P Global Market Intelligence's metals and mining team, Chris is now Mining Beacon's editor-in-chief and lead commentator. He will be posting three blogs every week, one on Monday reviewing market conditions over the prior week, a second on Tuesday summarising recent development in the mining sector, and a light-hearted look on Thursday at the global mining scene.