Resource World Magazine

44 www.resourceworld.com o c t o b e r / n o v e m b e r 2 0 1 4 MINING Coral Gold gets back to the mining industry's roots by David Forest W ith gold prices languishing near US $1,200 per ounce, you'd think the bullion mining business would be shuttering new drilling. But an interesting phenomenon has instead been emerging. Rather than throwing in the towel, gold producers are regrouping – and going back to the most basic strategies in their playbooks. For one thing, that means focusing on proven geographies. A tack that was underscored in June by the buyout of Osisko Mining by major producers Agnico Eagle Mines Ltd. [AEM- TSX, NYSE] and Yamana Gold Inc. [YRI-TSX; AUY-NYSE; YAU-LSE], with the deal hanging a $3.7 billion price tag on the company's Malartic Mine in go-to producing centre Québec. In short, this "back to basics" mentality is seeing major pro- ducers revisiting the most proven clusters of gold deposits on the planet – even when it comes to exploration. We can look at one recent transaction in particular as an illustration. That deal is an earn-in agreement struck by the world's largest gold miner, Barrick Gold Corp. [ABX-TSX, NYSE] where the major has tar- geted a piece of ground in one of the most famed gold terrains on Earth – Nevada. This $12 million dollar deal comes with a junior partner whose multi-decade history in this well-known district makes it about as "old school" a developer as one could find any- where in the business: Coral Gold Resources Ltd. [CLH-TSXV; CLHRF-OTCQB; GV8-BSE, FSE]. Coral Gold has long held some of the ripest acreage in the Cortez play of Nevada. A place that has become the undisputed centre of the universe when it comes to gold production – by vir- tue of its big mineral endowment, well-understood geology, ease of access, and low population density around mining centres. Coral's Robertson Project here isn't some Johnny-come-lately addition on the fringes of this mega-play either. Rather, the acre- age lies in the heart of the play, adjacent to some of the largest active mines in the region, including the Pipeline, Cortez Hills and Goldrush mines, producers of 1 million ounces of yearly gold output. It was 1985, in fact, when Coral's management struck a deal with local prospectors to acquire the core of the Robertson Project. The company then expanded the land position through subsequent staking, based on recognition that this was a high- potential area for new gold finds. It didn't take long for this concept to prove out. At-surface gold mineralization was discovered in 1987 which would eventu- ally be expanded into an overall inferred resource of 2.7 million ounces – and the first production began a year later. Importantly, this initial output was accomplished by simple and low-cost heap leaching methods; a factor that would become critical to the most-recent part of the story at Robertson. The modern incarnation of the project kicked off in 1997 when Coral Gold signed up a deal with Placer Dome (later bought by Barrick) on some of the Robertson lands. Over the next decade, Coral also drilled its own holes across the project, which in 2007, led to the discovery of what are known as the "lower plate" rocks that host major gold mineralization throughout Nevada. These results were especially intriguing given that Barrick pro- duces gold from the lower plate at its Pipeline Mine, located just a few miles south of Coral's Robertson land holdings. This fact was a big driver in the major originally joint-venturing Robertson – and has become all the more important as Barrick looks inward to its core operations for growth today. That fact became clear in March, when Barrick suddenly moved to tie up the GoldRidge sector of Coral's land holdings here. This being a space where the major sees potential to find additional zones of lower plate mineralization, which could offer new feed to Pipeline's operations. Things are now moving fast with Barrick having recently com- pleted the first drill hole of a $12 million, five-year program that can earn the major a 60% interest in GoldRidge. Should this work be successful, the firm can up its interest to 75% by completing a scoping study on the project. For Coral Gold's part, the new joint venture provides an excit- ing punctuation mark to the firm's ongoing development activities at Robertson. A recently-completed preliminary economic assess- ment on the current resource here, for example, shows a value of $360 million for a conceptual heap leach operation – at an initial capital cost of less than $90 million. This shows that when times are tough, activity doesn't stop. It simply moves back to the most proven locales in the business. n Looking across Coral Gold's GoldRidge claims towards the Pipeline and Cortez Hills Mines, Crescent Valley, Nevada. Photo courtesy Coral Gold Resources Ltd.

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