NGM, i-80 Gold asset swap opens doors

In the aftermath of an asset exchange with Nevada Gold Mines, i-80 Gold Corp. has started managing and updating the Lone Tree Complex along Interstate 80, and the company is now operating the Ruby Hill Mine acquired in a separate acquisition. Nevada Gold Mines now owns 100% of the South Arturo mining property near the Goldstrike Mine on the Carlin Trend, and i-80 Gold now owns the Lone Tree Complex and Buffalo Mountain property west of Battle Mountain, after finalizing an asset exchange. In a separate deal that was timed with the asset exchange, i-80 Gold took over the Ruby Hill Mine just outside the town of Eureka.

“The recent transactions to acquire Ruby Hill, Lone Tree and Buffalo Mountain not only make i-80 one of the largest holders of gold and silver resources in the United States, but also positions the company to become one of Nevada’s most prominent producers with substantial processing infrastructure, including an autoclave,” said Ewan Downie, chief executive officer of i-80.

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“This is a win-win transaction for both Nevada Gold Mines and i-80,” said Greg Walker, executive managing director of NGM, when the asset exchange was announced in September with finalization following in October. NGM also received a low-cost option to acquire i-80’s Rodeo Creek exploration property adjacent to South Arturo in the exchange deal. NGM had owned 60% of South Arturo, with i-80 Gold holding the remaining 40%,

NGM is a joint venture of Barrick Gold Corp., which is the operator and owns 61.5%, and Newmont Corp., which holds 38.5%. Walker said the i-80 Gold’s acquisition of Lone Tree that NGM had on care and maintenance becomes a “transformational asset for i-80. In return, NGM’s acquisition of i-80’s 40% of the South Arturo Joint Venture secures additional ounces with both open pit and underground optionality for our Carlin operation.”

In Barrick’s earnings presentation in November, Barrick President and Chief Executive Officer Mark Bristow said recent drilling at South Arturo has “identified a new ore controlling structure that could again extend the mine life of this asset.” The exchange also allows i-80 Gold to use NGM processing facilities while the Lone Tree facilities are readied for use. Matthew Gollat, executive vice president of business and corporate development for i-80 Gold, said the ability to process ore was a key component of the deal.

He said this will give i-80 Gold the ability to process ore from its Granite Creek, McCoy-Cove development properties and from Ruby Hill “while we are retrofitting the Lone Tree autoclave.” Lone Tree will become Reno-based i-80 Gold’s “company hub,” Downie said at that time of the asset exchange announcement. Along with the autoclave, Lone Tree has a carbon-in-leach mill, flotation mill and a heap leach facility, providing i-80 with several ways to process gold and silver ore.

The Ruby Hill acquisition for £75 million in cash and £8 million in shares was finalized in October with Waterton Global Resources Management’s subsidiaries Waterton Splitter LLC and Waterton Splitter II LLC, and i-80 has taken over operations at the open pit mine. Waterton also has milestone rights for up to £67 million. The company reported that transactions with NGM and Waterton give i-80 Gold 6.3 million ounces of measured and indicated gold resources and 104.5 million ounces of measured and indicated silver resources, along with 8.4 million ounces of inferred gold resources and 76.5 million inferred silver ounces.

The Ruby Hill property includes the Archimedes open pit, a mill and a larger property package with additional gold and silver deposits, according to i-80, which reported it will begin permitting for the construction of a decline for underground access to the high-grade Ruby Deeps deposit and the Blackjack Zone. The company is looking at transporting the refractory ore from those underground ventures to the Lone Tree facility for processing. In the interim, open pit mining and leaching will continue at Ruby Hill.

The company, meanwhile, is continuing to develop an underground mine at Granite Creek near NGM’s Turquoise Ridge operations in Humboldt County, and the company is still planning underground mining at McCoy-Cove south of Battle Mountain. In an Oct.

28 announcement, i-80 Gold stated that initial assay results from the underground drilling program at Granite Creek were positive, and the company’s senior geologist, Tyler Hill, said “these results confirm the high-grade opportunity that we are developing at Granite Creek and demonstrate excellent continuity of mineralization within the Otto and Adam Peak fault horizons that appear to broaden with depth.” The company stated that it is looking at initially processing refractory ore from Granite Peak at the nearby Twin Creeks mill under the asset deal with NGM that provided for access to NGM processing facilities until Lone Tree is up and running.

The asset exchange with NGM included contingent consideration of up to £50 million based on production from the Lone Tree property and an arrangement for substitute bonding, and the release of NGM bonds, for reclamation obligations at Lone Tree and Buffalo Mountain. Also, NGM at closing reimbursed i-80 roughly £7.3 million that had been advanced by i-80 for the autonomous truck haulage test work completed at South Arturo and for funds that i-80 advanced that weren’t used for reclamation. Along with announcing finalization of the asset exchange with NGM, i-80 Gold also reported it has closed a private placement allowing the company to sell slightly more than 39 million common shares for nearly £83 million.

NGM subscribed to nearly 23 million shares in connection with the asset exchange, according to i-80 Gold. That means NGM owns 9.9% of i-80 shares. Orion Mine Finance also was expected to own 9.9% of i-80 Gold shares, according to i-80 Gold.

Also, Equinox Gold Corp. planned to participate in equity private placement through the exercise of a portion of its anti-dilution rights for the Ruby Hill acquisition.

Equinox Gold acquired Premier Gold Mines earlier this year and spun off i-80 Gold into a stand-alone company.

The net proceeds of the private placement will go toward the cost of acquiring Ruby Hill, and exploration and development of Lone Tree, Buffalo Mountain and McCoy-Cove, according to i-80 Gold’s announcement. ?

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