On October 14, JBY announced a deal to acquire up to 100% of the Independence gold project in Nevada to complement its portfolio of lithium projects in Quebec’s James Bay district.
The company’s move to Nevada was no doubt inspired by its stablemate Sun Silver. The two companies share an office and have two common directors in Gerard O’Donovan and Dean Ercegovic, as well as sharing chief financial officer Daniel Loughnan and company secretary James Doyle.
Since listing earlier this year, Sun has more than quadrupled off the back of exploration success at its Maverick Springs silver project in Nevada. Healthy market sentiment for precious metals doesn’t hurt either.
Investors clearly like JBY’s move, with the stock rallying strongly ever since the acquisition was announced.
While the stock has come off this week, it’s still double pre-acquisition levels.
The low-cost acquisition will see JBY issue 16.25 million shares to earn an initial 51.54% stake in the project and can earn the remaining 48.46% over a two-year period by spending US$3 million on exploration and issuing further shares.
The acquisition remains subject to shareholder approval, which will be sought at a meeting in Perth later this month.
Independence project
The Independence project, which comprises 14 unpatented mining claims and 84 unpatented mill sites, is just 16km south of the Nevada gold mining town of Battle Mountain.
Independence is considered to be advanced due to its existing resource.
The project has a measured, indicated and inferred NI 43-101 (Canada’s answer to JORC) resource of 1.18 million ounces of gold and 7.6Moz of silver, reported in late 2021.
It also hosts a less recent high-grade skarn inferred resource of 3.78 million tonnes at 6.53 grams per tonne gold for 796,200oz of gold.
JBY executive director Andrew Dornan told a Resources Rising Stars lunch in Perth last week that the company’s top priority was converting the resource to JORC.
A recent near-surface, high-grade discovery was made outside the existing resource, returning 24.4m at 9.11g/t gold and 25.2g/t silver, including 18.3m at 12.06g/t gold and 30.7g/t gold and 9.1m at 23.16g/t gold and 49.8g/t silver.
“We’ve got really easy targets to start off with,” Dornan said.
Other near-surface, high-grade intercepts at the project include 44.2m at 4.19g/t gold and 10.53g/t silver, including 6.1m at 26.47g/t gold and 27g/t silver; 47.2m at 1.33g/t gold and 25.56g/t silver; and 13.7m at 9.52g/t gold and 4.48g/t silver including 6.1m at 19.83g/t gold and 7.78g/t silver.
The near-surface mineralisation remains open in all directions.
“There’s more hits within this than Johnny Farnham,” Dornan said.
Skarn mineralisation extends to a known depth of more than 1000m and mineralisation remains open in all directions.
“The high-grade skarn mineralisation has world-class potential,” Dornan said.
Drilling is planned for the current quarter and will be funded by a A$1.5 million placement at 15c, which is expected to be approved at a shareholder meeting later this month.
JBY had A$1.2 million in cash at the end of September.
Right neighbourhood
Nevada is considered one of the best mining jurisdictions in the world, regularly topping the Fraser Institute survey.
Its status has been further bolstered in recent years by the formation of the world’s largest gold-producing complex in the world.
Nevada Gold Mines (NGM) was founded in 2019 by merging Barrick Gold and Newmont Corporation’s assets in the state.
Barrick holds 61.5% and is the operator, with Newmont holding the balance.
The complex has proven and probable gold reserves of 29.2Moz and measured, indicated and inferred resources of 59.4Moz.
Last year, NGM produced 1.865Moz of gold at all-in sustaining costs of US$1366 an ounce. Guidance for 2024 is 1.65-1.8Moz of gold at AISC of US$1350-1450/oz.
NGM’s Phoenix mine adjoins JBY’s new Independence project.
Independence’s near-surface measured and indicated resource has an average grade of just 0.37g/t gold.
However, Phoenix, which produces around 240,000oz of gold per annum, has a head grade of as low as 0.32g/t.
AISC are just over US$1000/oz and Dornan said it was NGM’s most profitable mine.
“This mine is printing cash,” he said.
The previous owners of Independence had completed some study work, which JBY plans to build on.
Dornan suggested a heap leach operation could be permittable within 12-18 months, which will form part of the company’s future work.
Donald Trump’s election victory this week may not have pleased everyone but it will no doubt be good for companies wanting to permit projects in the US.