Expropriated in BC, Max Resources is Back on its Feet in Nevada
By Kevin Michael Grace
Stuart Rogers was sitting on a gold mine in November. The President of MAX Resource Corp (MXR:CA) had just announced a major find at its Crowsnest project in BC’s Flathead Valley: assays as high as 19 g/t over 6.1 metres and 50.3 g/t over 1.5 metres. Then in February, the BC government announced a moratorium on all mineral and energy licences in the area. Today, Rogers has put that behind him and can’t say enough about Max’s burgeoning properties in Nevada—a “mining-friendly jurisdiction,” as he likes to call it.
Rogers recounts, “I’ve been involved in the resource industry in Vancouver since 1987, and I’ve been president of MAX since 2002. As with most companies, we try things, and if they don’t work, we reorganize and try again.” Key to MAX’s comeback is Clancy Wendt, VP Exploration—”over 40 years experience; he’s very well connected; and he knows Nevada like the back of his hand.” The next step was developing a portfolio of quality properties there.
MAX’s three properties are Diamond Peak, Table Top and East Manhattan Wash. Diamond Peak is “at the south end of the Carlin Trend, 32 miles north of Eureka and the Archimedes Mine run by Barrick,” Rogers says. “We just finished a soil sampling program, and we should have the results in October. We’ll start drilling in November. There was over 3.5 ounces per ton of silver sampled in outcrop in 1999 by MK Gold. And they had some interesting zinc intervals: 11.6% within 60 feet of surface.”
Rogers says of Table Top, “It’s in northern Nevada, near the town of Winnemucca. Newmont is exploring the Sandman in a joint venture with Fronteer; we’re immediately adjacent to them. We completed drilling in September. We have intercepted the structure at depth around 1,000 feet, and we like what we see. The assays will tell the tale in early October.”
“My favourite property changes day to day, as the results come in,” he declares. At the moment, Rogers’ favourite seems to be East Mountain Wash, 40 miles north of Tonopah and eight miles south of the Kinross-Barrick Round Mountain open-pit mine, which has produced 12 million ounces of gold. A bulk sample from East Mountain returned 4.9 g/t of gold, and auger drilling will begin in October.
“We’ve identified a mineralized area at least 5,500 by 1,500 feet there,” Rogers reports. “We feel the grade we are getting at surface goes to a reasonable depth below. We want to move on to deeper drilling and prove up enough potential to get a major interested in getting involved. We’ve been in discussions, and they’re watching what we’re doing.”
You need at least a million-ounce potential to get on anybody’s radar screen – Stuart Rogers
The purpose of the junior resource industry is to take the risk for the majors, Rogers says. “They need to replace their reserves, whatever their production is. Otherwise, their asset base is shrinking.” However, “A few hundred thousand ounces of gold isn’t going to do it. You need at least a million-ounce potential to get on anybody’s radar screen. The majors need to replace at least five million ounces of production each year, one way or another.”
The good news for juniors like MAX is that with gold at $1,300 an ounce, ore previously thought unviable is now being mined—for instance at Round Mountain, where the resource estimate is calculated based on an average grade of only 0.64 g/t.
Rogers is surprisingly philosophical about the BC government’s expropriation of Crowsnest, despite being compensated only for the sunk costs, $750,000, not the actual worth of the property and the fall in share price. “You can’t fight the government; so we’re just going to get our money and move on. Sad but true.”
Refusing to dwell on what might have been, Rogers is focused relentlessly on MAX’s future. He concludes, “We’re getting critical mass; we’ve got three good shots; and we’ve got $2.3 million in the bank now. We’ve got the expertise; we’ve got the contacts with the majors and the access to properties; and Nevada’s a mining-friendly jurisdiction. The economics of gold have never been better.”