Precious Metals Special Report

Outline:
... Part One: Overview
... Part Two: The Fundamentals
... Part Three: Overview of Players, Two Majors
... Part Four: Profiles of Sample Junior Players
... Part Five: Cortez Trend Maps, Pictorial Overview

Part Five: Cortez Trend Maps and Pictoral Overview

Exploration is very much a 3-D geological visualization process. Below I present various illustrations regarding geological concepts. In regard to John Kaiser's rational speculation model described in Part Two, the key investment question we are trying to answer is whether geological indicators along the Cortez Trend suggest strong potential for more "elephant" targets, and if so, what areas are highly prospective. In the long run, the kind of geological chart analysis that I show in this section, combined with the analysis cited in geological technical reports, will probably aid the savvy investor more than Wall Street "technical" chart analysis of stock price movements.

For the lay investor, the objective is to know enough geology to be able to follow the thought processes of junior exploration company geologists and separate out plausible exploration projects that are based on facts, sound reasoning, and sound economics from projects that are mostly hype. According to Rick Rule, President of Global Resource Investments, the percentage of "real companies" with "real projects" out of the total universe of the junior mining sector is not particularly high. James Puplava has pointed out from his experience as a precious metals fund manager that the key question he has learned to focus upon is whether or not the company's projects in question will some day result in one or more economic mines.

As a caveat, I need to remind the reader that much of the geological discussion in this section is conjectural and theoretical and therefore might be proven wrong. All that having been said, this is a real life detective story --and treasure hunt.

The gold exploration process can actually help make learning geology a lot of fun.

The Cortez Trend Property Map

Note: The following overview map titled "Battle Mountain - Eureka Trend Mining & Exploration Activity, Nevada, United States of America, September 2004" was produced by Mineral Information Maps, a division of Intierra Ltd., jointly with The Northern Miner. Contact Glen Jones, Intierra Resource Intelligence, e-mail: glenj@intierra.com, web site: http://www.minmaps.com/, tel: (403) 202-8683; FAX (403) 288-5275. (This map reflects a 26 Oct 2004 update file that shows the Newmont property surrounding the Mule Canyon mine and a few other changes).

Click for larger image -- opens in a new window.

Three "Blow Up" Sections from a Scanned-in, Physical Map Version of the Map Above:

Note: The following three sections of the map titled "Battle Mountain - Eureka Trend Mining & Exploration Activity, Nevada, United States of America, September 2004" were cut out and scanned in from the overview hard copy map produced by Mineral Information Maps, a division of Intierra Ltd., published jointly with The Northern Miner. Contact Glen Jones, Intierra Resource Intelligence, e-mail: glenj@intierra.com, web site: http://www.minmaps.com/, tel: (403) 202-8683; FAX (403) 288-5275. (This is a slightly older version of the overview map depicted above).

Click for larger image -- opens in a new window.

Click for larger image -- opens in a new window.

Click for larger image -- opens in a new window.

The three sections above of the map titled "Battle Mountain - Eureka Trend Mining & Exploration Activity, Nevada, United States of America, September 2004" were produced by Mineral Information Maps, a division of Intierra Ltd., published jointly with The Northern Miner. Contact Glen Jones, Intierra Resource Intelligence, e-mail at glenj@intierra.com, web site: http://www.minmaps.com/, tel: (403) 202-8683; FAX (403) 288-5275. Intierra Resource Intelligence not only produces valuable hot play maps, but has also assembled an impressive business intelligence data base that covers virtually all the companies listed on its maps.

Geological Map Analysis

Looking for Carlin Comparables

Faults, gold deposits, and intrusives on the Carlin Trend

Finding appropriate "comparables" is often critical in geological analysis. The Carlin Trend provides most of the "comparables" being used by junior mining company geologists to help define their exploration objectives along the Cortez Trend.

In the chart to the right, the names of the major faults that comprise the Carlin Trend from top to bottom are the Post-Genesis Fault, the Leeville Fault, and (unmarked on the chart near Gold Quarry) the Good Hope Fault.

As a caveat, we must note that inferences and comparables are based on interpretations, which may be subject to errors and omissions. Despite this, I think it is well worth discussing the conventional wisdom about the nature of Carlin Trend gold deposits.

a) Most of the largest gold deposits are within a mile of one of the major faults. The three outliers are within about 2.5 miles.

b) The deposits tend to be near intersections of cross-faulting structures (indicated by broken blue lines) with major faults. These cross faults tend to run either in a WNW direction or in a NE direction that lies somewhat perpendicular to the WNW cross faults. For reasons I will explain in the "NE School" section near the end of this article, when gold is not found on a major fault, it tends to be found on a WNW cross structure rather than on a NE cross structure.

Horst block structures (discussed in my Nevada Geology 101 section in Part Two) tend to occur on both sides of the major faults, and Lower Plate rock tends to host better gold deposits than Upper Plate rocks. In addition, gold is found not only adjacent to major faults, but also inside them. The Post Genesis Fault has some long stretches of interior gold.

c) Major gold deposits tend to be near where major intrusives and faults intersect. According to Nevada Pacific Gold's glossary, an intrusion is a result of "The process of emplacement of magma into pre-existing rock; magmatic activity. Also, the igneous rock mass so formed." An intrusive may correlate with gold formation by indicating a deep crack in the earth's crust through which gold-bearing fluids may flow. Intrusives can also serve as a heat pump that help circulate water currents that in turn help precipitate gold out of gold-bearing fluids.

Dr. Ken Snyder, a retired geologist, informed me that almost all Carlin-style deposits are related to diking, which is a form of igneous (volcanic) intrusion. (Dr. Snyder, incidentally, discovered the Ken Snyder [Midas] mine site on the Carlin Trend, lives in northern Nevada, and has explored Nevada over a period of thirty years). Dr. Snyder said it was also important to have silty quartz component siltstones as host rocks. The gold bearing fluids were slightly acidic, which dissolved the calcite and made the rocks more porous. There needed to be enough quartz within the siltstones to prevent their increased permeability from collapsing the rock. Once gold-bearing fluid came in contact with the carbonates in the rock, this changed the chemistry during the cool-down period and gold dropped out. Successive waves of gold-bearing fluids may have continually pulsed through these same rock formations over millions of years to build up gold mineralization within them.

Placer Dome has stated that of the three types of gold deposits commonly found in north central and northern Nevada, namely Calin type, porphyry associated, and epithermal, the company focuses on Carlin deposits due to their size and economic viability. In this article, I also discuss epithermal deposits being explored by Klondex Mines and others operating in the Northern Nevada Rift area that runs through the Cortez Trend. Epithermal deposits are hosted in basalts spewed out by volcanic action rather than in the sedimentary structures that host Carlin-type deposits.

d) The Carlin Trend itself consists of several major faults that have breaks and "pivot points" between them. Some major faults run parallel to others or run in different angles. In the map above we see a gap between the markings "Gen Fault" and "Leeville Fault." The Cortez Fault system probably has similar characteristics. Therefore it is unrealistic to assume that the Cortez Fault system runs in straight lines, or lacks offset, divergent, or parallel structures (referred to as "splays").

Dr. Snyder pointed out that a major fault can split into two major faults. He is fairly certain the Cortez Fault system runs from the Pipeline Complex SE through the Cortez Hills deposit and down to Tonkin Springs. Beyond this, he is uncertain about the direction it takes either north of the Pipeline Complex or south of Tonkin Springs. Hence, north of the Pipeline Complex on the Cortez Trend it is possible there could be two different versions of the Cortez Fault system, one running NW towards the Phoenix Deposit and another running more northwards by the Hilltop mine and Slaven Canyon. Conversely, there might be just one of the latter two options. Similarly, south of Tonkin Springs, there might be one or two or more faults. There are some extreme complications to the geology in this area. Some geologists think that Gold Bar Mine site is not on the main Cortez Fault system but could reflect a block that slid off the Roberts Mountain formation.

e) Gold is not found everywhere along the major faults that make up the Carlin Trend, as noted in the blank areas on the map above. However, it is tough to completely rule out the presence of gold in these blank areas, because there is always a chance that thin slivers might exist at slightly lower depths than someone has ever drilled before (for example beginning at 1,000 or 2,000 feet down).

Dr. Snyder informed me that the area is extremely complicated geologically. It may take months to work out the strata of just a few hundred feet of ground, and northern Nevada is a very big area. Even in the Carlin Trend area, which has received the most attention of any part of Nevada, there are huge gaps that people do not know much about in terms of details. It takes a lot of time and money to conduct a thorough analysis by looking at each rock type in core samples and figuring out what it is telling you.

Dr. Snyder noted that one reason why there is so much blank space between Leeville and Gold Quarry on the Carlin map is that there is a valley filled with alluvium as deep as 5,000 feet that separates the two sites. He also believes that the blank area west of Gold Quarry may be relatively under-explored.

The Nevada Pacific Gold chart below shows the alluvium between the Carlin mine and the Gold Quarry mine that Dr. Snyder has referred to. It also shows how most of the major economic deposits are along fault structures and within siliciclastic rocks, and to a much lesser degree in carbonate rocks. Indeed, there is a substantial area just west of the Gold Quarry mine that has a lot of siliciclastic rocks and almost no mining activity.

Source: Nevada Pacific Gold

f) Carlin deposits can exist at a variety of depths and in a wide variety of shapes. Some Carlin mines are still finding gold down to 6,500 feet below the surface with no end in sight, at grades of 1 to 1.5 oz a tonne. Grades actually tend to improve with depth. .As a countervailing factor, at greater depths miners also tend to encounter ores with higher sulfur content and other "refractory" characteristics that make leaching gold out of ore more expensive. Conversely, weathering or "oxidation" of ores near the surface makes them easier to process.

Carlin gold deposit structures can be narrow and angle vertically towards the surface rather than lie on a horizontal plane. Some Carlin deposits that have become very lucrative to miners are only about 100 to 400 feet wide in areas and start over 300 feet below the surface. Exploration programs can easily miss them without saturation drilling.

Some other important general observations.

The major faults are often very old, some going back over several hundred million years. Many are very deep, penetrating over 20 km down into the earth's crust. Some geologists told me it would be a crude, but not bad analogy to compare the San Andreas Fault in California today with the Carlin and Cortez fault systems that existed over 100 million years ago. Currently gold deposits and other forms of mineralization are forming around hot springs near the southern end of the San Andreas fault at the Salton Sea in Southern California. Further south along the San Andreas Fault one finds the Mesquite open pit mine, which has produced millions of ounces of gold.

With a few small exceptions, none of the major Carlin faults or Cortez faults are obvious from the ground or by aerial pictures or satellite reconnaissance, having been covered over by many events in relatively recent geological history, to include volcanic activity and the creation of cross rifts.

Most Carlin-style gold deposits resulted from an upward thrust of gold-bearing fluids roughly 38 million years ago into northern Nevada. As discussed in Part Two, this geologic event coincided with the end of a several hundred million year tectonic plate compression cycle and also a counter clockwise rotation of the Pacific Plate that changed the direction of the Hawaiian Island chain.

Dr. Snyder pointed out that the 38 million year mark actually involved a huge pulse surge, as if in a statistical cluster function. However, Carlin-style deposits have actually been formed in many other geological ages as well. The Willard Gold Mine by Lovelock, NV has a 600,000 year old Carlin deposit. The Hycroft Mine at Sulphur, NV has a 4 million year old deposit. At the other end of the scale, deposits at the Goldstrike Mine on the Carlin Trend go back 120 million years. This reinforces the idea that it can pay to be in area that has had gold formation characteristics for many different geological ages in order to offer numerous possibilities for "reactivations" of structures.

Dr. Snyder also pointed out that there is a wide geographic dispersion of Carlin-style sites across northern Nevada, to include places in Utah. He feels that it is absurd to think that Northern Nevada has been over-explored. At this stage he does not know if Cortez will end up being bigger than Carlin. He also does not know if some other mineral belt in Northern Nevada could wind up being bigger than either Carlin or Cortez. He believes that there is definitely a lot more opportunity ahead.

Last, but not least, the Carlin Trend consists of more than just isolated deposits. In the view of John Leask, Chairman of White Knight Resources, it reflects a major gold field. As gold bearing fluids rose to the surface, they became trapped under Upper Plate structures and formed deposits, analogous to the way oil and gas fields form pools underneath anticline traps. In fact there are carbonaceous anomalies surrounding certain gold deposits that lead many geologists to believe that oil or gas were also once trapped in the same area. Later these hydrocarbons got cooked off into graphite.

Fault-Centric Theorists and the Search for the Lost Continental Shelf

White Knight's theory about the Cortez Fault system location. The company's properties are depicted in green. Source: White Knight Resources.

As noted in my discussion of White Knight Resources in Part Four, its geophysicist, Hans Rasmussen, once worked for Newmont Mining to find deposits along the Carlin Trend. He would often hear the slogan, "If you are out of the Fault, you are out of the game." Hence, finding the Cortez Fault system has been White Knight's foremost objective.

Mr. Rasmussen believes that the Cortez Fault system has been the super highway that has brought gold-bearing fluids from very deep in the earth towards the surface. White Knight views the Cortez Fault system as part of an extremely old continental shelf structure. Interestingly enough, a Jan 2005 Placer Dome presentation has a slide showing the Australian continent rifting away from western North America, to include central Nevada, somewhere between 900 to 700 million years ago (Timmons, et al, Feb 2001 GSA Bulletin). In this slide, the edge of North America runs through north central Nevada.

The picture above shows White Knight's concept regarding where the main Cortez Fault system lies. However, the location of the fault system is still the subject of considerable conjecture.

According to Brian Kirwin, President of American Bonanza, one can find an exposed sheet of breccia the length of a football field south of the Cortez Mine that reflects an outcropping of the Cortez Fault system. This was exposed by miners as a result of blasting. However, for the most part, the Cortez Fault system lies concealed underground. As discussed in Part Two, much of the topography you see on a topographical map, which is the same that you would see driving through the area today, was created by dropping valley floors of the Basin and Range in the last 20-30 million years as the western U.S. has started its stretch or "extension" cycle. The crack lines that define the valleys that parallel mountain ranges were probably created during the preceding approximately 350 million year long compression cycle, as I will discuss later.

White Knight's portrayal of the Cortez Fault system theorizes that the Cortez Fault makes a pivotal break between the Pipeline Complex and the Cortez Hills discovery area in the central Cortez Joint Venture area. The Pipeline Complex and Cortez Hills discovery are about 14 km or 8.7 miles apart. Crescent Valley, filled with alluvium, lies between these two deposits. The northern stretch may be anchored in the south by the Pipeline Complex. It may angle northward at about 10 degrees northwest. The southern stretch may be anchored in the north by the Cortez Hills discovery, and move diagonally in a SSE direction.

The NNW Main Fault School and Supporting Structures

Interestingly enough, as we start at the Pipeline Complex and work our way SE and then SSE, we see ample evidence of "supporting structures" strongly associated with the Cortez Trend Fault system. It is worth reviewing some of this evidence from such sources as Placer Dome, J-Pacific Gold, and American Bonanza.

The illustration below from Placer Dome's September 2004 Technical Report shows the presence of parallel "controlling structures" angling towards the Cortez Hills discovery. Hans Rasmussen of White Knight believes that this is none other than the Cortez Trend Fault system.

Source: Figure 10-2: Cortez Hill Deposit and Gravity Anomalies from the September 2004 Placer Dome Technical Report. This provides "ounce-foot" data, with the following grade and thickness key: Gray 1-2, Blue 2-5, Yellow 5-10, Green 10-25, Orange 25-50, Red 50-100, Magenta 100-200, Purple 200-300, Pink >300.

The report "The Golden Trend Project of J-Pacific Gold Inc." by geologist David R. Shaddrick shows how very definite fault structures exist SSE of the Cortez Hills discovery. Below I provide an interpretive geological map and a cutaway "cartoon" provided in his report:

Used by permission. Originally published in Geological Society of Nevada Special Publication 40, 2004, "Gold Deposits of the Southern Battle Mountain Trend, Lander and Eureka Counties, Nevada." Paper posted at: J-Pacific Gold.

Please note in the illustration above the Northern Nevada Rift running SSE down the east side of the property (discussed later). In addition, there are not one, but two separate faults running down the western side marked "Cortez Fault 1" and "Cortez Fault 2." According to Mr. Shaddrick, the existence of these faults is well documented. In fact, he said that he would amazed if another paralleling Cortez Fault did not lie further to the west, possibly running through the NDT Ventures property.

Used by permission. Originally published in Geological Society of Nevada Special Publication 40, 2004, "Gold Deposits of the Southern Battle Mountain Trend, Lander and Eureka Counties, Nevada." Paper posted at: J-Pacific Gold. Please note, the ore bodies depicted in pink are hypothetical, not real.

Please note that the"cartoon" above, like the preceding illustration, shows the two Cortez faults and also NE trending faults running in parallel. Later I discuss the "Northeast Fault School." These faults tend to run parallel to the mountains and valleys created in more recent geological history. Curiously absent from these illustrations are WNW faults running in parallel to each other that I also discuss later.

Incidentally, the cartoon above also shows "ore bodies" in pink. Mr. Shaddrick emphasized that the "ore bodies" are hypothetical only, and that geologists frequently engage in conjecture from sketchy data. As a caveat for investors, the existence of faults do not guarantee gold mineralization, and there is always a chance that J-Pacific will never find economic gold deposits on its Golden Trend property.

Looking further south, we also see some interesting fault structures running in parallel in the area of American Bonanza's Gold Bar Mine. In my recent phone conversation with Brian Kirwin, American Bonanza's CEO, he felt that there is a strong probability that the southern end the Cortez Fault system runs through the Gold Bar mine, as indicated by the red line marked "Ore Controlling Fault" in the map below. Even if it turns out this could be a splay and not the main fault, he still believes that American Bonanza's property is very likely adjacent to if not right on top of the fault system.

Source: American Bonanza

The American Bonanza map above also depicts horst blocks, which can be indicative of being next to a major fault. Incidentally, Mr. Kirwin worked for Placer Dome from 1990 to 1997. He discovered the Rooster Deposit on BacTech's property, drilled the Hilltop Mine area, and ranks among the most seasoned exploration geologists in the Cortez Trend area. He happens to agree with White Knight that the main fault system very likely runs up north through the Hilltop Slaven area. But he also pointed out that it can be hard to find deposits that might lie over 500 feet under ground in sometimes thin and high angle formations, and reminded me that there could be some significant segments on the Cortez Trend map where no economic gold deposits may ever be found.

Alternatives to Shot Gun Drilling

How do we uncover the location of the ancient fault system lying beneath more recently created mountains and valleys without having to drill out the whole area? White Knight has developed a gravity map that incorporates U.S. Geological Survey data. However, it is proprietary and currently not available to the general public. The company believes that this map shows the outline of the Cortez Fault system. The gravity map was shown as part of Mr. Rasmussen's Dec 10, 2004 presentation at the Northwest Mining Association Technical session. I also gave a presentation during this same technical session, albeit on a different topic, and have seen this map.

Below I have reproduced a reasonably similar map publicly available in a U.S. Geological Survey (USGS) report on the Internet, and also used by the Bravo Venture Group to show the location of its properties in the Cortez Trend area.

Above: Figure 5 taken from Chapter 17 "Regional Analysis of the Distribution of Gold Deposits in Northeast Nevada using NURE Arsenic Data and Geophysical Data" from the USGS article "Contributions to the Gold Metallogeny of Northern Nevada Open-File Report 98-338.

The caption reads: "Map showing isostatic residual gravity of the pre-Cenozoic [greater than 65 million years ago] basement rocks of northern Nevada (after Saltus and Jachens, 1995), gold, mercury and antimony deposits, as well as contours and axes of arsenic anomalies from soil and stream sediment samples. [Arsenic and mercury tend to precipitate out of gold-bearing fluids under similar conditions as gold and hence are viewed as tell-tale indicators]. Warm colors mark areas with rock in the middle and upper crust that are denser than those in areas marked by cool colors." The sites marked with white stars as "Granite," "SF," "Gabel," "PH," "3Bar," "NoLM," "So GB," and "So LM" are properties of the Bravo Venture Group.

According to Mr. Rasmussen, the highs portrayed in reddish colors on the gravity map to the east are on an old continental plain that contain a limestone section. The lows portrayed in bluish color to the west define the old continental slope that formed siliceous sediments. This was part of a gently sloping shelf that formed shallow sediments. The light blue area running diagonally between the two areas gives a rough sense of the old continental shelf and the Cortez Fault system that exists today. The exception is the area north of Pipeline, where White Knight things the Cortez Fault system runs vertically just west of the vertical axis of arsenic anomalies line.

Please recollect from my discussion of tectonic plate movements in Part Two that "fifty different exotic terrains were sutured on to the west coast during the Mesozoic era (248 to 71 million years ago), adding 25% to the continental crust of western North America." White Knight is looking for a gold fluid-leaking suture line where perhaps a new continental mass got slam-packed against western North America relatively early in the compression cycle.

According to John Leask, Chairman of White Knight, as one moves from west to east, there could be a 7 km difference in the thickness of the earth's crust across the Cortez Fault system related to its ancient role as a continental shelf. He also pointed out that the fault system shows 170 million year old Cretaceous intrusives. The NNE trending mountains to the west of the Cortez Fault system intersect the Cortez fault system near intrusive structures, such as a Granite Mountain Intrusive near Slaven Canyon, a Gold Acres Intrusive by the Pipeline Complex, a Cortez Intrusive by Cortez Hills, a Keystone Intrusive by Pat Canyon, and another intrusive by Celt-Teck JV on the map. (Please note that further down in this article I reproduce an aerial magnetic map created by X-Cal that shows the Gold Acres and Cortez Hills intrusives).

As previously mentioned, intrusives correlate with gold deposits along the Carlin Trend. They reflect rising magma bodies that penetrated towards the earth's surface and solidified below the surface. They help to establish the age of geologic stress events that can coincide with volcanic "reactivation" of ancient fault systems. They may also provide heat pumps that help to circulate water that in turn help to precipitate gold out of gold-bearing fluids. In fact, to this day drill holes in the Cortez Joint Venture area and in many other places throughout the Cortez Trend area show hot water.

It is important to note that the gravity map above has been calibrated to try to find certain features. At the end of this article I briefly discuss the geophysical process used to try to determine what lies underneath the surface without taking drill samples. Part of the calibration process requires filtering out certain "noise" factors. For example the Northern Nevada Rift episode that took place approximately 16 million years ago spewed out a lot of volcanic material containing magnetite. Since the Northern Nevada Rift era accompanied the gold samples found by Klondex, this magnetite is exactly what Klondex wants to pick up in its magnetic map depicted below in the Northern Nevada Rift section. However, this is also exactly what the aforementioned USGS survey and White Knight want to filter out in looking for fault structures older than 70 million years. Later in the "WNW School" section I show a gravity map created by X-Cal to show a WNW structure that does not show up on the USGS gravity map. It has apparently been calibrated differently.

Hence, these gravity studies might be both a blessing and a curse. On the one hand geophysicists can calibrate the maps to help show them what they need to know. On the other hand, they might calibrate the data gathering process to tell themselves what they want to hear based on preconceived notions, but what may not in fact lead to a realistic interpretation. Therein lies a possible danger.

Cross Fault vs. Cortez Fault-Centric Theorists

As previously observed, most Carlin deposits occur near a cross fault by a major fault. Perhaps the simplest explanation for this is the fact that as gold bearing fluids rise, they seek the path of least resistance. They may start in a vertical fault plane running north and south, and then seep into a fault plane running east and west, and then finally seep into and settle in a horizontal strata near the surface.

The intersections of fault lines leading into and out of the Cortez Trend area remind me of skewed asterisk (*) symbols, in which fault lines leading out of these "asterisks" in all directions are staggered up and down the Battle Mountain-Eureka Trend.

The "vertical" of our "asterisk" consists of the the Cortez Fault system (NNW or about North 35 degrees west). This may have originated with tectonic plate rifting events that took place perhaps 700 million years ago, and may consist of very deep and sometimes parallel or juxtaposed continental shelf and tectonic plate edges that have moved against each other and have reactivated repeatedly over time. The Northern Nevada Rift may have involved a relatively recent 16 million year old reactivation through a paralleling structure. It runs about North 15-20%, or ten degrees east off the surmised Cortez Fault system.

The down-sloping rightward diagonal of our "asterisk" consists of very ancient WNW faults, that might be related to cracking along the line of thrust during the approximately 350 million year long compression cycle

The upward sloping diagonal NE faults of our "asterisk" parallel the mountain ranges and valleys that are topographically visible today. They seem to correspond to the period of extension that commenced about 30-40 million years ago.

The Northern Nevada Rift

I will start with this because all geologist agree that the Northern Nevada Rift is very real and it has created real gold deposits. (Getting all geologists to agree on something can be an unusual event). According to Richard Kern, chief geologist for Klondex, the Northern Nevada rift was created by volcanic upheaval roughly 16 million years old. It's location is unmistakable from magnetic studies which pick up magnetite in the basalt that flowed from it's eruptions. It is probably a geologically recent reactivation of a much older plate tectonic fault system that characterizes the Cortez Trend Fault system.

Source: Klondex

The volcanic gold formation process in the 16 million year old Northern Nevada Rift area was different than the 38 million year old pulse surge in gold-bearing fluids associated with Carlin deposits. Gold deposits associated with lava thrusts tend to be formed during the last stage of a volcanic cycle, once the lava cools down.

According to Mr. Kern, everything Klondex drills is epithermal, meaning the gold precipitated out further away from the earth's center at a lower temperature than other types of gold deposits. Quite often the earth's surface collapses as the lava cools, leaving a caldera such as Lake Tahoe in California or Crater Lake in Oregon. He believes that calderas are really good places to look for gold. They tend to have lots of intrusives, extrusives, and faulting. Intrusives in particular are really critical, since the big gold districts seem to have them. He also looks for a "plumbing system" of ground water to help precipitate out the gold, which he believes is critical. Lastly, it helps to have a long-lived fault system with a lot of faulting and re-faulting and even more re-faulting. His core samples are full of breccia (loose rocks created by faults grinding against each other), which have the kinds of open spaces and surfaces that allow gold-bearing fluids to advance and settle in.

The Northern Nevada Rift created the gold system for the Ken Snyder Mine on the Carlin Trend as well as the gold deposits found at Klondex's Fire Creek Mine and Newmont's Mule Canyon Mine. Richard Redfern, VP Exploration for Senator Minerals, Inc. has walked most of the properties inside the Northern Nevada Rift, and has found many old mercury mines. (As mentioned earlier, mercury and arsenic are viewed as a tell-tale indicators because they tend to precipitate out of gold-bearing fluids under similar conditions as gold). According to Mr. Redfern, most drilling has only been down to 400 feet, and almost no one (except Klondex) has drilled over 1,000 feet down. He pointed out that the Northern Nevada Rift episode actually occurred 17 to 14.5 million years ago, with many repeated volcanic cycles involving expansion, cooling, and collapse taking place in this area. The Northern Nevada Rift is very deep, going down to the oceanic crust, and in places runs parallel to the Cortez Fault system.

Source: American Bonanza

This chart above produced by American Bonanza is a slightly different interpretation of the Northern Nevada Rift compared to the Klondex Chart. Here it is referred to as the Cortez Rift. It places both the Tonkin Springs property controlled by BacTech and the Gold Bar Mine operated by American Bonanza within the intersection of the Northern Nevada Rift and the Battle Mountain-Eureka Mineral Belt.

Another aspect of this map that I find interesting is the fact that most of the mines are located in hilly or mountainous areas. As I have mentioned previously, this is where Cortez Trend properties tend to be staked. As the mountains have eroded down, their surfaces tend to become that much closer to the Lower Plate strata that provide the best "sponge" for holding gold deposits. In contrast, the valleys are filled with alluvium. Explorationists must drill that much deeper in the valleys to find gold, therefore exploration is more expensive there and tends to get put on the back burner.

In my discussion of Miranda Gold in Part Four, I mention the areas where the company feels the upper plate areas have eroded away to provide "windows." Also, John Leask, Chairman of White Knight, told me that upper plate rocks tend to be good candidates for capping off gold-bearing fluids similar to the rocks that create oil and gas anticline traps. These upper plate rocks tend to diminish as one gets closer to the town of Eureka in the southeast area of the picture above. In other words, one ideally needs a site where upper plate rocks once existed to help trap gold, but have now eroded away.

The West North West School

I encountered an interesting group of geologists in this camp, who include the geologists at Miranda Gold, Tone Resources, and Senator Minerals.

One can observe a WNW diagonal trend simply by drawing a line from the Pipeline Complex to the Cortez Hills deposit. In fact, this was illustrated in two slide presentations created by Placer Dome provided below:

Source: Placer Dome presentations

Source: Jan 2005 Placer Dome Cordilleran Round up Presentation

Placer Dome's bullet point "NW Regional Alignment of Gold Mineralized Districts" refers to the larger white diagonal streaked parallel lines that define the Battle Mountain -Eureka Mineral Belt. The dotted white parallel lines that tilt further to the west define the "WNW Intrusive Axis Domain" structures, and are the same in concept as the diagonal parallel lines in the first slide that show Cortez Joint Venture area properties. Last, but not least, the more vertical red lines described as "NNW Structural Fabric Controls Gold Deposits" include the Carlin Fault system, the Cortez Trend Fault system, and probably the more recent Northern Nevada Rift (which may have been a reactivation of an ancient fault system). Significantly, this slide shows many parallel red lines in the Cortez Trend area, suggesting that the Cortez Fault system may have many additional faults running parallel to the east and west of it. This could make exploration really interesting in the years ahead.

Incidentally, what is excluded from the slide above are NE rifts. Please remember from my discussion of Nevada Geology 101 in Part Two that faults also tend to parallel the visible mountain ranges and valleys in Nevada today. You can get a sense of the NE direction of the terrain features from the alternating blue and purple colors in the slide above. More on NE structures later.

Source: Miranda Gold Corp.

A Gold Bar Trend running in parallel with a WNW Cortez Joint Venture Trend? Even though it seems likely that rifts paralleling the Cortez Fault system (if not the system itself) run south though American Bonanza's Gold Bar Mine, an important reason why Newmont Mining, Miranda, Bravo Venture, and Tone Resources (Nevada Gold Ventures) have staked so much property to the east is that they believe that there could be WNW-ESE cross faults that run through their properties. On top of this there could be an overlay of the Northern Nevada Rift, plus there are interesting geochemical shows in the soil and some historical mines in these areas. Lastly, there are concentrations of sedimentary rock on the east side of what could have been an ancient continental shelf.

Joe Hebert, VP of exploration at Miranda, pointed out to me that WNW theory is what helped him find the ET Blue discovery in the Cortez Joint Venture area. He was also part of the team that made the Cortez Hills discovery. It may be true that gold-bearing fluids originate very deep in the earth through a NNW Cortez Fault system, but as these fluids get closer to the surface, they seem to deposit themselves in parallel WNW "stair case" formation patterns at an oblique angle to the Cortez Fault system up the Battle Mountain - Eureka Trend.

Mr. Hebert also pointed out that lamprophyres are deeply rooted in the crust. Every one of them in the area has a WNW trend. (Lamprophyres, according to Wikipedia, are "rocks containing phenocrysts...essentially dike rocks, occurring as dikes and thin sills, and are also found as marginal faces of plutonic intrusions.) According to Mr. Hebert, lamprophyres may indicate "controlling structures" that once trapped methane gas. Then came the gold bearing fluids during the great 38 million year old event that created virtually all the Carlin formations. These fluids may have also become trapped by the same structures that had trapped the methane gas. The chemical reaction between gold-bearing fluids and the methane may have triggered "catastrophic dumping" resulting in carbon, water, and separated-out gold deposits that have "carbon front" characteristics. The methane gas subsequently got chemically converted or "cooked off."

USGS Regional Bouguer Gravity map. Source: X-Cal. The caption has the following bullet points: "Major NW Structure, Alignment of Deposits, Periodicity of Deposits, and Major Deposits at Structural Intersections."

USGS Regional Airborne Magnetic Survey. Source: X-Cal. The caption has the following bullet points: : "Alignment of Intrusions, Deposits Near Intrusions."

In the two pictures above created by X-Cal, please note how the intrusions seem to confirm WNW structures, and how magnetics also seem to confirm the Northern Nevada Rift. Interestingly enough, the X-Cal gravity map seems to be calibrated differently from the previously displayed USGS map, since it shows different features.

The meaning of WNW structures decoded?

Richard Redfern, geologist at Senator Minerals, told me that WNW-trending formations not only exist in the Cortez area, but also at the Rain mine, Gold Quarry, and elsewhere on the Carlin Trend. He thinks the cracks could be related to the Roberts Mountain overthrust that took place during the Mississippian era (345 to 320 million years ago). This is where one plate got thrust up over another plate. (When one tectonic plate gets thrust over another, as in the case of the Himalayas or the Klamath Mountains of northwest California or southwest Oregon, it is called obduction. When one a tectonic plate gets thrust under, such as in the case of the Juan de Fuca plate that runs under Portland, Oregon it is called subduction).

The Roberts Mountain overthrust in north central Nevada is over 100 miles long. Mr. Redfern doubts that it got thrust in one smooth motion along its long length, like a housewife pulling cellophane wrap over leftovers, but rather got ratcheted in broken strata segments in a herky jerky pattern, leaving numerous parallel cracks. The WNW cracks might be the result, and indicate the direction of the overthrust. He pointed out that no one has proven this theory, and according to one professor the cracks may have formed during one of three periods: a) the pre-Cambrian period (more than 500 million years ago), b) Mississippian period (345 to 320 million years ago), or c) Tertiary (38-40 million years ago).

In fact, it could have been "all of the above" since geological formations and movements frequently "reactivate" after lying dormant for long periods, or as in the case of plate tectonic movements can proceed in continuous slow motion of about a centimeter a year for tens or hundreds of millions of years.

I believe that the animated map created by Dr. James Sears at the University of Montana may provide some answers. During the tectonic plate compression period that lasted several hundred million years, the resultant force vectors moving inland from northern California seem to angle downwards in a east southeast direction into north central Nevada. Please recollect the theory that 50 different terrains got sutured on to the West Coast during the Mesozoic Era (248 to 71 million years ago), so many changes also occurred in waves.

End of Part Five: Cortez Trend Maps and Pictorial Overview, Page 1

Go To Part Five: Cortez Trend Maps and Pictorial Overview, Page 2