The price of gold is now well above $1200 per ounce, allowing a few junior gold mining companies to get moving on lower performing open pit mining properties.
Nevada is at the top of the unemployment list, with 14.3%, according to official figures. This is a very bad place to be, but Nevada benefits from the activity in gold and other minerals, plus a workforce already geared up for mining.
Yerrington Nevada is around 20 miles west of the property and should benefit from the mining activity, along with other small towns like Schurz.
Mining employment rose by 8,000 in August. Since a recent low in October 2009, employment in the industry has increased by 72,000. Support activities for mining has accounted for about three-fourths of the gain.
Bureau of Labor Statistics
Junior gold mining company, Gryphon Gold Corp. (OTCBB: GYPH; TSX: GGN) says their Borealis open pit mine in Mineral County Nevada is to begin production soon. The gold mine, already fully-permitted, is expected to rank #6 in the state’s 12 existing gold mines already in production, based on extracting the estimated 50,000 ounce per year.
The Borealis open pit mine, which would not have been profitable just a few years ago, could now operate at a substantial margin. Higher prices move the window of opportunity to help lower grade properties and make higher grade properties much more successful.
The Gryphon Gold Borealis property was owned by another company in the late 1980’s, which produced almost 200,000 ounces between 1987 and 1989. The same open pit mine and surrounding area have known and expected resources exceeding 2 million ounces, which make the effort economically feasible.
Gryphon Gold says it has an additional 383,000 ounces of high-grade ore measuring 0.058 oz/t, in the 27.5 square mile property and they plan to keep drilling.
A Gryphon Gold – Sage Gold joint venture agreement to develop the Borealis property has now been canceled, giving Gryphon Gold full control. After the annual meeting, Gryphon extended its option to fix its net smelter royalty at 5% until February 2011, giving the company time to begin production in the near-term.
While gold prices have risen substantially, recent laws enacted have pushed the price of mining claims higher. As a result, many small exploration companies cannot afford to register claims. Though it is a burden on small exploration companies, there is opportunity for well-financed companies.