Nevada King bumps Atlanta gold project resource by 122%

A resource update for Nevada King Gold’s (TSXV: NKG) Atlanta project more than doubles contained gold in the measured and indicated categories to just over 1 million oz., representing 91% of the entire resource.

The Atlanta gold mine project’s overall tonnage in those categories now totals 27.7 million tonnes grading 1.14 grams gold per tonne, a 122% increase over the resource from 2020, Nevada King reported Wednesday. The past-producing open pit project sits on the Battle Mountain trend, about 264 km northeast of Las Vegas.

“The results mark a major milestone at Atlanta, confirming a high-grade and high-confidence oxide gold system in one of the most sought-after jurisdictions in the world,” Nevada King CEO Collin Kettell said in a release. “We are pleased to exceed the 1-million oz. threshold in the measured and indicated category while maintaining the grade of oxide mineralization well above 1 gram per tonne.”

Nevada King shares fell 22% to C$0.16 apiece on Wednesday morning in Toronto, for a market capitalization of C$67.8 million.

Investors may have been expecting better numbers in the update after Atlanta produced 110,000 oz. of gold and 800,000 oz. of silver from 1975 to 1985 for Standard Slag. Companies including Gold Fields (NYSE: GFI), Kinross Gold (TSX: K; NYSE: KGC) and Meadow Bay Gold drilled more than 40,000 metres there since the 1990s.

Kettell helped start New Found Gold (TSXV: NFG; NYSE-A: NFGC) in Newfoundland and Labrador, which also suffered a dramatic share price fall after publishing a resource. In April, the CEO funded half of an C$11 million capital raising for Atlanta, showing “conviction” to the project, he said.

Nevada King’s update follows months of strong drill results at Atlanta, where the capacity of its stage three drill program was increased to 30,000 metres in April. The resource update incorporated results from the stage one and two definition drill programs.

High-grade core

The measured and indicated resources also include a high-grade core of 524,000 oz. gold grading 3.99 grams gold at a 2 grams gold-equivalent cut-off grade, Nevada King said. That core contains more ounces than in the 2020 resource and at more than triple the average grade.

Measured and indicated silver also more than doubled in the update and now totals 8.6 million oz. grading 9.75 grams silver.

Inferred resources come to 3.6 million tonnes at 0.84 gram gold for 98,500 oz., about one-third less than in the 2020 report. Inferred silver decreased by 75% to 299,500 tonnes grading 2.56 grams silver.

Expansion potential

The update incorporates much more high-grade ore than was discovered in the initial resource, Nevada King exploration manager Cal Herron said.

“[It’s] largely the result of thicker, higher-grade intercepts within the West Atlanta Graben Zone,” he said. “We see clear potential for expansion of this zone to the south, north and west with the possibility of finding additional elevated high-grade zones.”

The company envisions that about half of the open pit oxide resources can be processed at a mill and half by heap leaching.