The company - which was the operator for the 2012 season at the project - said planning is underway to transfer operatorship to Agnico-Eagle Mines Ltd. (TSE:AEM) in January, as agreed to in an option agreement between the parties.
Under the terms of the agreement, originally announced in September, Agnico-Eagle has the option to earn up to a 65-per-cent interest in the Homestake Ridge project by spending $25.3 million over five years. It also has the option to arrange 100-per-cent of capital expenditure funding of the project to earn an additional five per cent, for a total 70-per-cent working interest.
Agnico-Eagle is required to spend $3.5 million in 2013 on exploration and development work on the property as part of the agreement.
During the 2012 exploration season, Homestake completed 13 diamond holes for a total of 4,743 metres at Homestake Ridge. The company said the program consisted of two phases, with the second phase being funded by Agnico-Eagle.
The first phase was conducted at the South Reef target, located about 800 metres to the southwest of, and on a parallel mineralized trend to, the main Homestake deposit and the Homestake silver deposit.
Notables holes from this phase included a 4.00-metre interval averaging 11.4 grams per tonne (g/t) gold and 3.7 g/t silver from drill hole HR12-243; and a 2.9-metre interval averaging 5.9 g/t gold and 2.0 g/t silver, which includes a 0.5-metre interval averaging 16.3 g/t gold and 4.6 g/t silver from drill hole HR12-240.
The second phase tested shallow, on-strike projections of the South Reef target as well as several other targets on the property. This phase consisted of eight core holes, at a cost of about $1.8 million - funded by Agnico-Eagle. The combined 2012 drilling budget totaled roughly $2.5 million.
Homestake said that all assay results are expected to be received by early January.
The project is being advanced as a potential high-grade underground mining operation with a current, NI43-101 compliant indicated resource at a 3.0 g/t gold equivalent cut-off, of 191,000 ounces of gold and 1.35 million ounces of silver.
It also has an inferred resource of 530,000 ounces of gold and 13.47 million ounces of silver.
Homestake said two deposits have been delineated so far, with a third, South Reef, discovered late in 2011. Multiple exploration targets remain to be tested on the large 2,585 hectare asset.
The company also holds an option to acquire a 100-per-cent interest in the Kinskuch project located near Homestake Ridge, and a 9.76-per-cent interest in Bravada Gold Corp. (CVE:BVA), which is exploring and developing numerous gold/silver projects in Nevada.