106°F
weather icon Clear

2 new major finds may extend Nevada’s gold boom for years

ELKO In a state where gold mining dates to the 1830s, two major new deposits could keep the Silver State among the world’s leaders in gold production for decades to come.

The first deposit, known as Goldrush, will start producing in 2021, and the adjacent Fourmile will follow sometime after 2025. They are located roughly 20 miles west of Elko, and each could produce 5 million ounces of gold over a decade.

The value of those finds will fluctuate depending on the market price of gold and the difficulty and cost of recovering it. But a back-of-the-napkin calculation, with gold at its current value of more than $1,500 per ounce, could set the 10-year value of each new find at around $7.5 billion, with a potential profit of $3 billion for mining companies.

Given those numbers, one might imagine mining executives celebrating these discoveries with toasts and shouts of “Eureka!” But identifying new deposits is just part of the business.

“We’re gold mining people. We don’t get that excited,” said Greg Walker, who leads a new joint venture launched by two giant mining companies that will develop the finds. “It’s not like an oil field, where you’re drilling down and suddenly oil gushes out and you all get excited.”

If there is a “Eureka!” moment in gold exploration, it’s when lab results come back with the right numbers, Walker said. For the Elko operation, that came in 2015, when testing confirmed his team’s predictions.

“We’re excited, but we’re not champagne-popping excited,” Walker said. “We’re just really excited as an industry and a business, because this is going to be a really big deposit. We have the belief that it’s as big as any other mine that we’ve found in this area, so that’s pretty significant.”

He added: “It’s not a stretch to say that we’ll (still) be here in 30 to 40 years, and if we keep finding deposits like Fourmile, we’ll be here for longer than that.”

‘A healthy industry’

Nevada is home to one of six major gold producing areas in the world. The new discoveries come well into what is considered the state’s fourth gold boom, now decades old.

“It is a healthy industry in Nevada,” said Dana Bennett, executive director of the Nevada Mining Association. “There’s many indications to be optimistic about the future.”

Though mining operations occupy a minuscule portion of the state, the industry’s contributions and metrics are outsized.

Consider these nuggets:

■ Gold is the state’s top overseas export by value, accounting for $4.9 billion, or 44 percent, of the state’s $11 billion of exports in 2018. A year earlier, gold accounted for more than half the total. The top destinations are Switzerland and India, where Nevada-mined gold is refined.

■ The state produces more than 80 percent of the gold mined annually in the United States. If it were a separate country, Nevada would be the world’s fifth-largest producer, behind China, Australia, Russia and Canada.

■ Over the past decade, gold production has averaged about 5.5 million ounces per year. The value of that production in 2018 was just over $7 billion, representing 84 percent of all mining production in the state.

Gold mining in Nevada didn’t really take off until the price of gold started to climb in the 1970s. The gold mined since then in places like the Carlin Trend — a 5-mile-by-40-mile belt named for the Elko County town it runs beneath — is typically invisible to the naked eye in the ore where it resides. Microscopic particles of gold are recovered from the ore by various methods.

Prospecting for the new deposits started in 2014. A single exploratory drill hole can cost $250,000 to $1 million, so before a drill goes in the ground, geologists conduct magnetic surveys, look for telltale surface rock outcroppings and study the below-ground geologic layers.

Based on their findings, they map out a drilling plan — in this case, 11 holes. The first 10 came up short. The last hit was what the team was hoping and expecting to find.

“It’s more around the geology than actually the gold result,” Walker said. “It’s all around what happens in the ground, and that’s why this area is so prospective. There’s a lot of really good geology here, lots of volcanic action, lots of foldings and faults of the earth’s crust, which gives us pathways for the gold to come up.”

Two giants join forces

The world’s two largest gold mining companies, No. 1 Barrick Gold Corp. and No. 2 Newmont Corp., account for more than three-quarters of Nevada’s annual gold production. In July, they merged most of their Nevada assets into a joint venture, Nevada Gold Mines Corp., announcing that the new company would “rank as the largest global gold producing complex by a wide margin.” Walker was named executive managing director.

Toronto-based Barrick and Colorado-based Newmont have long been competitive in Nevada. They have operated more or less side by side in the state for more than three decades, their ore trucks driving miles past one another to get to their separate refining facilities.

The new venture’s assets comprise eight mine complexes and associated processing facilities that produced about 4.1 million ounces of gold in 2018.

In all, there are now three so-called Tier One gold assets in the joint venture’s portfolio. The combined Goldrush-Fourmile complex, expected to be one of the biggest projects in the world, would become the fourth.

“To find another Tier One in the middle of Nevada in the 2020s, it’s just gonna be mind-blowing to do that,” Walker said at the Elko office in the fall.

The joint venture, which employs about 7,000, hopes combining operations will save $500 million annually starting in 2020. It cut about 130 positions when it formed, and 70 people lost their jobs.

“The whole joint venture makes good business sense,” said Walker, a straight-talking Australian with 40 years in the industry, the last 17 with Barrick.

“Why wasn’t it done 20 years ago? There’s probably some personalities and some egos — there’s always going to be,” he said.

Historically speaking, the timing for the merger makes sense, said Rich Perry, administrator for the state Division of Minerals and a former Newmont vice president. In each of the previous precious-metals booms, mining interests eventually consolidated as extraction became more difficult and the quality of the ore degraded.

“This is no different,” Perry said. “You’re consolidating because you’re getting into lower-grade ores, and you need to consolidate to reduce your operating costs.”

Consolidation will keep gold mining in Nevada going longer, he said. “Because if you can drop those operating costs, all of a sudden what was waste becomes ore.”

Environmental concerns, new reserves

Shoddy 19th-century practices saw the Carson River polluted by mine tailings. Mercury used in milling and extraction also ended up there, and a 130-mile stretch of the river across five counties remains a federal Superfund site.

Many of the lingering pollution problems from mining arise from such legacy issues. But in 2015, Barrick and Newmont, without admitting violations, agreed to pay $591,000 in fines to the Environmental Protection Agency to settle allegations of excessive mercury releases at two open-pit mines near Carlin dating to 2007.

Since 1989, Nevada mine operators have been required to post reclamation bonds and submit plans before the start of operations that detail how the land they mine will be restored. There are currently $3 billion in reclamation bonds that aim to protect against a mining company failing to meet its obligations.

“In mining, before you can open, you have to explain to the government, in a process that is subject to public comment, how you’re going to close,” Bennett said. “And in anticipation of your closure, you are required to put up a bond in case you wander off and don’t pay for that closure.”

Walker said mine companies work with American Indian tribes in culturally sensitive areas and where artifacts are discovered. They also work with regulators on protecting the environment and vulnerable species.

Things are different today than they were 40 years ago, when Walker started in mining. “We don’t even look at an operation if you can’t politically and socially operate it,” he said.

“We’re all morally interested in making sure the community and the environment’s looked after,” he added. “It’s a business case. You destroy your community or destroy your environment, you can’t operate. You don’t have a license to operate if you’re irresponsible.”

Contact Bill Dentzer at bdentzer@reviewjournal.com or 775-461-0661. Follow @DentzerNews on Twitter.

Don't miss the big stories. Like us on Facebook.
Business Videos
Sahara Las Vegas sues blogger over closure rumor - VIDEO
Sahara Las Vegas has filed a defamation lawsuit against Scott Roeben, the man behind vitalvegas.com, for reporting a rumor that the Las Vegas Strip property would close in September.
MGM Resorts announces “Viva Las Office” program - VIDEO
MGM Resorts International announced its new “Viva Las Office” program that encourages business travelers to work remotely from the Bellagio or Aria.
Las Vegas housing market sees record prices despite pandemic
Las Vegas’ housing market is “on fire” despite the coronavirus pandemic’s devastating effect on the economy, as sales totals surged and prices hit another all-time high last month. (Michael Quine/Las Vegas Review-Journal)
Sahara Las Vegas gets COVID-19 regulatory complaint - VIDEO
Sahara Las Vegas is the first property on the Las Vegas Strip — and the first in Southern Nevada — to receive a regulatory complaint related to coronavirus safety protocols. (Las Vegas Review-Journal)
CEO unsure if Palms will reopen - VIDEO
Frank Fertitta III, chairman and CEO of Red Rock Resorts, said the company doesn't know if or when the Palms or three other Station Casinos properties will reopen. (Las Vegas Review-Journal)
Two Las Vegas visitors win mega progressive jackpots - VIDEO
Two visitors to the Las Vegas Strip won mega progressive jackpots on table games Friday - one at Caesars Palace and another at the Flamingo. (Las Vegas Review-Journal)
D Las Vegas pulls back on dress code policy - Video
The policy barred people with face and neck tattoos from entering the downtown Las Vegas hotel-casino. (Las Vegas Review-Journal)
Amazon warehouse safety measures
Safety measures have been set up at the Amazon warehouse in North Las Vegas. (Las Vegas Review-Journal)
Allegiant Stadium hits substantial completion milestone
Nine-hundred-and-ninety-three days after the groundbreaking ceremony on Nov. 13 2017 on what was then a 62-acre lot of dirt, the $2 billion Allegiant Stadium, home of the Raiders, now holds its own in the Las Vegas skyline.
Tropicana hotel-casino on the Las Vegas Strip up for sale - VIDEO
Gaming and Leisure Properties, landlord of the 35-acre Tropicana, is looking to sell the Las Vegas property and rent it back or sell it outright.
Circa Sports bets big on NFL handicapping contests - Video
A little more than six weeks before the NFL’s scheduled season opener, the Circa sportsbook is staring at a potential multimillion-dollar loss. (Michael Quine/Las Vegas Review-Journal)
Sisolak: Bars in four counties to stay closed - VIDEO
Gov. Steve Sisolak said bars in four counties, including Clark County, will remain closed to help fight COVID-19. (James Schaeffer / Las Vegas Review-Journal)
Circa CEO comments on minor construction flaw
Circa CEO Derek Stevens, who also owns D Las Vegas and Golden Gate, said he had originally planned to fix a misplaced glass panel, but it may be here to stay.
Circa Las Vegas casino gets 1st six-ton exterior sign - Video
The under-construction Circa hotel-casino in downtown Las Vegas gets its first exterior sign bearing its name Thursday morning. (Michael Quine/Las Vegas Review-Journal)
Wynn Resorts Ltd. to place workers on furlough - VIDEO
Wynn Resorts Ltd. will put workers at Wynn Las Vegas and Encore on furlough, effective this week. This comes after paying its Las Vegas employees throughout the 78-day Nevada casino shutdown. (Las Vegas Review-Journal)
Switch, Capital Dynamics break ground on developments - Video
The project, Gigawatt 1®, includes the largest behind-the-meter solar plus battery project in the world. (Las Vegas Review-Journal)
Small crew removes scaffolding, shoring from MSG Sphere project - Video
The MSG Sphere at The Venetian has a skeleton crew on the job site to keep watch on the project, but workers recently removed scaffolding and shoring from the site. (Michael Quine/Las Vegas Review-Journal)
Amid the pandemic, Southern Nevadans are falling behind on mortgages - Video
As Nevada’s foreclosure moratorium ends, homeowners must figure out how to pay off any missed mortgage payments. (Las Vegas Review-Journal)
Casino foot traffic slows as COVID-19 cases rise - VIDEO
As COVID-19 cases continue to rise, Las Vegas casino foot traffic is starting to slow, according to a J.P. Morgan analyst.
Las Vegas entrepreneur Andrew Fonfa dies at 68 - VIDEO
Andrew Fonfa, a developer of the Lucky Dragon hotel-casino just off the Las Vegas Strip, died at age 68.
Las Vegas casinos modify smoking policies - VIDEO
On June 18, Las Vegas Sands Corp. updated its health and safety plan to ask table game players and spectators to refrain from smoking or vaping.
Tourists compare pre-pandemic Vegas to today's restrictions - VIDEO
We spoke with tourists walking up and down Las Vegas Boulevard about their experience so far amid pandemic restrictions, and how it compares to their last time in pre-pandemic Vegas. (James Schaeffer / Las Vegas Review-Journal)
Boyd Gaming Corp. has laid off at least 2,500 Nevada employees - Video
On May 22, the casino operator issued letters warning of possible impending layoffs . affecting anywhere between 25 and 60 percent of employees. The company had approximately 10,000 employees in Nevada.
Cosmopolitan of Las Vegas gives notice of potential layoffs - VIDEO
The Cosmopolitan of Las Vegas sent the state notice of potential layoffs at the 3,000-room property on the Las Vegas Strip.
Is Nevada the ‘gold standard’ for casino coronavirus response? - Video
Whenever experts begin comparing gaming jurisdictions, you’re bound to hear the phrase “gold standard” dropped in the conversation. (Las Vegas Review-Journal)
Resorts World Las Vegas activates 100,000-square-foot LED screen - VIDEO
Resorts World Las Vegas activated its 100,000-square-foot LED screen on its west tower on Independence Day, showing a digital fireworks display. (Las Vegas Review-Journal)
Station Casinos president dies in watercraft accident - VIDEO
Richard Haskins, president of Red Rock Resorts Inc. and Station Casinos, died Saturday in a watercraft accident in Michigan, according to a statement released by the company. (Las Vegas Review-Journal)
Hockey arena opponents erred in ballot initiative - Video
Opponents of a minor league hockey arena in Henderson collected enough verified signatures to put the disputed project on the November ballot, but then a problem emerged: A procedural error on the petition.
Layoffs at 'The Drew' force staff to sue owner
Rj Business reporter Eli Segall talks about the lawsuit and the future of the unfinished hotel and casino.
Vegas tourists react to mask mandate - VIDEO
Governor Steve Sisolak announced on Wednesday a mandate to wear face masks starting Friday. Down on the Las Vegas Strip tourists reacted on camera to the news. (James Schaeffer / Las Vegas Review-Journal)
THE LATEST
McCarran airport no longer using WeChat app

WeChat — one of the apps President Donald Trump believes could be a national security risk — is no longer being used as a tourism guide for Chinese visitors at McCarran International Airport.