Nevada Gold Holdings Inc. Provides Overview of Nevada Exploration

June 11, 2009 Filed Under: Oil and Gas  

Nevada Gold Holdings, Inc., a mineral exploration company focused on identifying and developing large-scale gold deposits in Nevada, is pleased to provide an overview of the current state of gold exploration in Nevada.

Nevada is a world-famous, mining-friendly state and the leading gold-producing state in the United States. According to the January 2008 U.S. Geological Survey, in 2007, approximately 7.7 million ounces of gold is produced in the U.S.; placing fourth largest nation behind Australia, South Africa and China.1 Nevada is home to some of the largest known gold deposits on earth, producing over 80% of the U.S. gold production.2

Over the last two decades, the discovery, development and expansion of large gold deposits such as Goldstrike/Betze-Post, Meikle, Pipeline, Round Mountain, Twin Creeks, Gold Quarry, and most recently Cortez Hills has established Nevada as a key global gold producer. The infrastructure in Nevada for recovery of gold from a variety of ore types has been dramatically increased by capital investment by major mining companies and global investors.

Gold producers such as Newmont Mining and Barrick Gold Corporation have billions of dollars of capital invested in their Nevada infrastructures. President and Chief Geologist of Nevada Gold Holdings Inc., Dave Mathewson comments on the current state of the industry, “Essentially the majors’ have become earth moving companies. They have billions of dollars tied up in their massive mills and ore moving equipment and need continued feedstock and deposits to keep their mills operating. Global gold production peaked in 2001 at approximately 85 million ounces and has been declining since to approximately 75 million ounces forecasted for 2009 and Nevada production peaked at approximately 9 million ounces per year at about the same time and has since declined to approximately 7 million ounces per year.”

Mathewson continues, “The majors need new discoveries to supply the ore for their infrastructure. Another interesting aspect of the gold exploration business is that most of the majors have dramatically scaled back their exploration programs. These days the junior exploration companies take on the majority of the exploration risk. If a junior exploration company is successful in identifying a commercial deposit, the majors will typically come in and buy the deposit from them. With current gold prices around $900 per ounce, I believe it would not be unreasonable to see a major pay $150 per ounce for a sizeable discovery in Nevada. The infrastructure is in place and the ore could be simply trucked to one of many existing mills in the state. This is why Nevada is an excellent place to explore in and why Nevada discoveries typically receive a premium valuation compared to the rest of the world. In addition, Nevada is home to some of the world’s largest deposits and I expect that even more district-scale discoveries will be made. I believe we have only scratched the surface.”

There are several junior mining companies active in Nevada trying to find the next major deposit. It is interesting to note that as the price of gold has been very cyclical, so has the interest in exploration and the experience of geologists. There are many new geologists coming out of universities in the last few years with the renewed interest in the sector. However, there are only a handful of experienced, successful exploration geologists left over from the last boom in the early 1980’s still active in the business.

1 http://minerals.usgs.gov/minerals/pubs/commodity/gold/mcs-2008-gold.pdf
2 “Mining review,” Mining Engineering, May 2007, p.28.