SOURCE: VantageWire.com -- It’s an often-used formula for success to assemble a land package near previously discovered gold. But beyond relying on the findings of others, it’s essential to find more gold, in the form of an economic deposit.
After sending a team of seven experts to perform due diligence on what was to become the company’s flagship, the team of Mineral Mountain Resources [MMV:CA] felt they’d found a match. Standing on the grounds of what was to become known as their Holy Terror Project, Mineral Mountain identified an opportunity with multi-million ounce potential, and high-grade economics within South Dakota that would change the company’s course.
Now the company is solely focused on the development of the Holy Terror Project, and just put out results from its own first round of drilling on the portion of the property once known as the Bismark Mine. As expected based on inferences made from historical data, the latest drilling results were very high-grade, with highlights that included: 11.4 g/t Au over 8 metres (including 17.07 g/t Au over 5 metres); 10.02 g/t Au over 3.9 metres; 4.95 g/t Au over 10.59 metres (including 7.14 g/t over 4.82 metres); and new gold horizons identified at 4.02 g/t Au over 10.02 metres (including 6.53 g/t Au over 1.82 metres).
After drill testing to 120 metres of vertical depth, the zones remain open. In total the exploration update included 11 diamond drill holes on the old Bismark Mine. Despite the fact that the mine only operated intermittently between 1904-1907, water shortages at the time ceased production. With today’s technological advancements, none of the problems that were encountered on this historical property should resurface, but some understanding of the history of the project is warranted to understand the scope of the project, and the bluesky that it presents.
What the expedition group saw in March of last year blew them away. Multiple high-grade historical mines grouped within an area only recently consolidated, located south of the famous Home Stake Mine, which over its time produced nearly 40 million ounces of gold respectively, making it the most successful gold mine in US history.
The Holy Terror Project was named after the private company that Joint Ventured the properties, and one of the historic mines on site. The Holy Terror Mine itself was shut-down over a century ago after a lawsuit regarding miner’s work conditions at the time forced the parent company into bankruptcy. But historical data showed that grades and widths of ore were in fact increasing as the operation went deeper, not decreasing.
Up until the 1980s, there had been no drilling on the property, despite multiple production sites. Historically speaking, the art of exploration hadn’t quite honed itself at that time, and visible mineralization at surface was used as a starting point and typically chased downward by miners with uncertainty.
Other mines on the property suffered similar fates. The War Act ended some of the mines’ productive runs at the onset of WWII, as war measures act L-208 deemed gold mining a non-essential service, and sent the miners to war.
For the many decades that followed, these veins remained dormant of any explorative activity. Thanks to overeager land scavengers in previous generations, many land titles were scooped up long ago when each small discovery was made during foregone eras.
The sheer number of landowners to sort through acted as a deterrent for many years from any majors looking to consolidate. Only a few decades ago, the prospect of consolidating what is now the Holy Terror Project would’ve seemed an insurmountable task.
But a private company called the Holy Terror Mining Company began the trek towards consolidation, getting it to a point that would lure a partnership. That partnership arrived with a company called Energy Fuels, which would go on to spend $4 million and identify at least 100,000 ounces.
The group moved through all of the baseline environmental studies and metallurgy, and was granted a permit for a bulk underground sample. Unfortunately for them, the timing had them operating during an era of $300 per ounce gold, and their source for ore processing, the Home Stake Mine, was on its last legs. Energy Fuels saw the projected returns to be too low to continue and walked away from the property, reverting the majority of their land back to the Holy Terror Mining Company.
THE NEW FLAGSHIP AND THE RAINY RIVER CONNECTION
Based on the success of management’s previous success running Rainy River Resources [RR:CA], the Mineral Mountain bid for the Holy Terror project was accepted by the Holy Terror Mining Company. By conveying the example of success that the team had already achieved with Rainy River, Mineral Mountain assured that they could really make this project move. Like with Rainy River, one strategy could see the team find a significant amount of gold to add to the resource before selling at a premium to a major. Unlike with Rainy River, however, there have been some additions to the team that allow them to go to further stages of development without necessarily having to hand off the baton.
Under the Holy Terror Mining Company, the property had 500 acres. Since taking it over, Mineral Mountain has expanded the acreage to over 4,100 acres in total, achieving what would’ve been seen as impossible only a few decades ago. Now the company has an enviable land package that might draw the attention of midcaps and majors down the road. Land consolidation was always a large barrier in this region, but somehow MMV was able to group its acres together for a grand total of only $1.8 million.
Going forward, the team expects to drill out many more targets, including the ones that were announced this week. They’ll be looking to define a 43-101 compliant resource, and will be do more exploration drilling for yet undiscovered targets within the same trend.
The high-grade results returned from this latest round of drilling are indicative of the high-grades that were expected in the first place. Historical data had averages of 9 g/t Au, whereas, the latest results show as high as 11.40 g/t Au. Overall the team can be happy that it successfully confirmed and expanded upon the work of its predecessors.
THE BOTTOM LINE
It’s easy to look at the results of the latest drilling and seize upon the high-grades alone. But, it’s more important to recognize that the results show not only robust grades, but also widths that are potentially viable for underground mining methods. More results like this along the way should prove that the project’s ancestors were definitely digging in the right direction.
Multiple economic calamities riddled this area to the point of obscurity. It’s because of this speckled history that Mineral Mountain was able to find the proverbial diamond in the rough with the Holy Terror Project.
Prior to the latest results, the company mostly drew the attention of some of the most seasoned geologically literate individuals. Previous fundraising attempts by the company seized upon individuals who took joy in pouring over the data. Anyone with a formal knowledge of mining deposits was very impressed with what Mineral Mountain had been able to put together. Thus, the previous fundraising attempts were successfully put together through targeting the right individuals.
Now the company sits with no debt and a favourable cash position. Going forward, the company should have access to a further $10 million through a swath of warrants that are priced at $0.35 (which is very close to the current price). Should these results impress the base, there’s a good chance that the company can have access to a further $10 million without another public financing.
Mineral Mountain appears to have found a very promising location in a safe jurisdiction with a history of production. The community seems to be on-board with the project, so long as measures are taken to ensure the quality of the water supply. Going forward, the team will look to repeat the success that they had with Rainy River, and continued results such as those of the first drilling campaign should help them do that.
G. Joel Chury
for the Bottom Line Report