Atlanta Advances its Idaho Gold-Silver Project
By Greg Klein
“Essentially, what we’re selling is cheap ounces in the ground,” explains Atlanta Gold TSX:ATG Director/VP/CFO Bill Baird. “Our discovery or development cost per ounce—including all overhead, all expenses in the company, everything—is less than $20 a [gold equivalent] ounce. We’ve got a very cost-effective operation.” That helps explain Baird’s ebullience during a time of market turbulence. And frugality notwithstanding, Atlanta’s game plan is ambitious. The company aims for a 250,000-ounce increase in its gold-equivalent resource each year.
With that in mind, the company focuses on the 889-hectare Atlanta Project, 60 miles northeast of Boise, Idaho. The project area, part of the Middle Boise Mining District, hosted 12 historic mines. “Until this year, the exploration was only on the Atlanta shear zone, which is 11,400 feet [3,477 metres] long, between 30 and 120 feet [9.15 and 36.6 metres] wide and goes down to a known vertical depth of 1,000 feet [305 metres],” Baird explains. “We recently announced that we stepped off the Atlanta shear zone, and we’re drilling holes north of the zone. We’re hitting some new gold-bearing zones there. We don’t know yet if they’re part of the zone. The total mineralized structures cover a horizontal distance of 50,000 feet [15,250 metres].”
Assays released September 27 include:
- 7.79 grams per tonne gold over 19.8 metres (including 25.92 g/t over 4.6 metres)
- 11.58 g/t over 10.7 metres (including 24.32 g/t over 4.6 metres)
- 8.14 g/t over 6.1 metres (including 11.83 g/t over 3 metres)
- 4.51 g/t over 13.7 metres
The September 2011 indicated estimate shows 6.83 million tonnes grading 3.45 g/t gold for 686,600 gold ounces and 9.04 g/t silver for 1.8 million silver ounces. The inferred category shows 1.79 million tonnes grading 5.42 g/t gold for 282,400 gold ounces and 8.16 g/t silver for 425,400 silver ounces. The gold-equivalent numbers are 719,000 ounces indicated and 290,000 ounces inferred.
The company keeps three rigs drilling 24/7. “We’ve drilled 46,000 feet [14,030 metres] to date this year. Our objective is to drill 60,000 feet [18,300 metres],” Baird says. “We have a number of assays pending, so there’s going to be news releases coming out probably through November. We’d like to end the year with 1,250,000 [gold-equivalent] ounces.
“We know the shear goes down to a vertical depth of 2,000 feet [610 metres]. We identified a million ounces in the top 1,000 feet [305 metres], but last year we found that at 1,000 feet the shear splits into two individual zones that appear to widen at depth, so that will increase the gold content per vertical foot and the economic potential. And we believe it extends at depth—as our chairman Jim Gray says, ‘Gold didn’t come from the sky, it came from underneath.’ If we confirm the continuity at depth, we can probably count on the Atlanta shear zone for three million ounces.”
An updated resource estimate and a PEA are scheduled for early 2012, with prefeasibility following.
“We’ll probably do another 50,000 or 60,000 feet [15,250 or 18,300 metres] of drilling next year as well,” Baird points out. “People love to see the resource going up, and we’ve always overshot every target we’ve set on the resource. But you get to the point where you have to start mining. We’ll continue to expand the resource, but it doesn’t make sense to spend money on drilling when you could be generating cash flow to cover the cost.”
We’re saying, ‘Let’s keep the mine to a pilot scale; let’s get it permitted and up and operating.’ As the resource grows, we’ll ramp up production accordingly —Bill Baird
For all that, Baird sees the actual mining scaled down from the 2008 plan, which entailed a large open-pit, cyanide heap-leach operation. “We changed it to a smaller open pit combined with an underground operation, a conventional gravity flotation mill on site, with no cyanide circuit. And that was very well received by the permitting agencies,” he says. “We’re saying, ‘Let’s keep the mine to a pilot scale; let’s get it permitted and up and operating.’ As the resource grows, we’ll ramp up production accordingly.”
While Baird doesn’t rule out a takeover, he says Atlanta’s team is ready for production. Baird’s 25 years of exploration and mining experience include a decade with Teck Cominco. Chairman/Director Jim Gray is a 50-year exploration geologist who co-founded Canadian Hunter Exploration.
Interim President/CEO Warren Holmes boasts over 40 years of experience including lengthy stints with Noranda Inc, where he served as VP/General Manager of Pamour Porcupine Mines, and with Falconbridge, where he was Senior VP of Canadian Mining Operations.
Ernie Simmons is Director/COO and VP of Mining. “He started mining underground before he even finished high school,” Baird says. “He ran Noranda’s contract operations in the United States. He started at least six mines in the US that I know of.”
Atlanta’s other claims consist of property in Quebec’s Abitibi region and diamond claims on Baffin Island.
At press time Atlanta had 182.64 million shares outstanding at $0.07 for a market cap of $12.78 million.