Standard Gold (OTC:SDGR) is a hybrid U.S. based junior gold development and a precious metals milling company. The Company’s reserves of tailings and ore dumps are akin to a junior mining company, except these minerals have already been mined, are above ground and ready to be processed. The milling side of the business represents an immediate and on-going revenue source for the Company.
A convergence of macroeconomic factors, such as rising precious metal prices, greater mineral exploration in combination with a lack of independent toll milling capacity and a dearth of specialized milling expertise makes Standard Gold uniquely positioned to become a leading provider of toll, specialty and custom milling services for precious and rare earth metals for junior mining companies based in the western United States, Canada, Mexico and Central America.
In March 2011 the Company acquired the assets of Shea Mining and Milling for stock, cash and debt assignment that included the land, buildings, one of the largest tailing holdings, ore dumps containing gold, permits, substantial water rights and gold and silver processing plant previously owned by NJB Mining in Tonopah, Nevada; and a second agreement for the purchase of a custom mill facility and assignment of lease, along with permits in nearby Amargosa, Nevada.
The tailing holdings and ore dumps represent potentially significant precious metal reserves for the Company. The tailings on the Tonopah property consist 2.2 million tons that are known as the Millers Tailings. Kappes Cassidy completed a preliminary non compliant assessment of 0.009 oz/t (opt) of gold and 1.22 opt of silver, with a current metal content value in excess of $85 million. The tailings also contain manganese and tungsten values that have never been evaluated. A second source of feedstock known as the Manhattan Dumps has been acquired and is 30 miles directly north of Tonopah. They contain unprocessed, low grade ore that accumulated from historic mining operations in the area, and contain from 100,000 - 200,000 tons, at grades of 0.036 opt to 0.297 opt of gold. Standard Gold is commencing two NI 43-101 studies to validate the value of the holdings.
The tailings and dumps will ultimately be processed at the Company’s gold/ silver and tailings processing reduction mill in Tonopah. The facility, which has a replacement cost of $24 million, was built in 1981 by Lurghi Engineering and processed 1,500 to 2,000 tons per day of tailings. The plant operated until 1984, until operations were shuttered due to low precious metal prices. Standard Gold will be refurbishing the plant, which contains an Allis Chalmers 12 x 16 Ball Mill with 1,250 hp motor, 94,000 gallon total capacity primary leaching tanks and 56,000 gallon total capacity carbon absorption tanks, along with leaching tank connectors and hydraulic system, over the next 12 months.
From an immediate and on-going revenue perspective Standard Gold has the ability to process ore, concentrate and carbon containing precious metals on four different processing methods simultaneously – (a) Gravitational Concentration, (b) Flotation, (c) Leaching and (d) Carbon Stripping – depending on the optimal methodology to extract the metals. Revenues from the Company’s first two contracts will begin in July and will be processed primarily out of the Company’s leased custom toll mill in Amargosa Valley, NV. This facility has a capacity to process approximately 50 – 70 tons/ day (18,500 tons/ year).
The Company is investigating establishing an analytical lab and hydrometallurgical recovery plant with capacity up to 6 – 10 tons/ Day in the Henderson, NV area. This facility will focus its processing on smaller carbon and concentrate projects. This state-of-the-art laboratory will be the nucleus to establish processing methods and circuit designs for the Amargosa and Tonopah facilities.
Standard Gold earns income primarily two ways for processing other company’s ore – (a) fixed fee per ton and (b) a royalty tied to the value of processed ore. The fixed fee, royalty and recovery rate of the precious metals will vary from project to project depending on the overall volume, nature of the material received and the process used to extract the precious metals. To date, Standard Gold has secured two contracts, a 100+ tons concentrate contract with the value of the recovered precious metals expected to be in excess of $4.0 million based on current prices for gold and silver and carbon stripping supply of 1 ton per week for 3 years from a Central American mine. Revenue from these contracts will begin in July 2011. The Company’s pipeline includes mines based in Nevada, Arizona, California, Montana, Mexico and Central America and the Company expects to make further announcements over the next few months. (The Company will receive 100% of the net revenues generated from the processing of the Millers’ Tailings and Manhattan Dumps.)
Standard Gold is led by a team of seasoned business, metallurgical, geological, mining and operations professionals. Alfred Rapetti, the Company’s CEO/ President, Director has over 40 years of experience in executive management with a strong background in finance and entrepreneurship. Ahmet Altinay is an experienced metallurgical engineer with expertise in technical operations and management of a complete metallurgical laboratory, custom processing facility and refinery specializing in ores containing gold, silver and platinum group metals. Mr. Altinay will manage the Company’s new analytical lab and hydrometallurgical recovery facility and provide guidance for the operations in Amargosa. Richard S. Kunter, FAusIMM, CP, MSME, and MMSA QP, is recognized as one of the preeminent metallurgical engineers. He has been responsible for the preparation and review of technical and/or qualified person’s reports, metallurgical and process development programs, statements of metallurgical recovery from mineral resources. Clyde Smith, PhD, PEng, Director, Advisor has over 40 years as exploration geologist with four ore deposit discoveries to his credit with an exceptional ability to identify geologic environments with potential for ore deposits and to solve complex geologic problems.
Gold Standard is currently seeking debt financing of $7.5 million to pay off the note to NJB Mining, purchase circuits for the Amargosa facility, establish the new lab at Henderson and fund the refurbishment of the Tonopah Process Plant.