Paramount Gold of Nevada Chief Executive Officer Glen Van Treek said his firm is expanding its holdings in Malheur County as it prepares to make a long-term investment in a gold and silver mining venture. (The Enterprise/File).
VALE – The Nevada company that wants to open a multimillion-dollar mine southwest of here expanded its footprint in Malheur County last month in a signal that the firm plans an extended stay.
Paramount Gold Nevada Corp. announced recently that it inked an option-to-buy agreement with Cryla LLC. for a controlling interest in 44 mining claims west of the Grassy Mountain mine project.
The 44 claims cover 580 acres and “offer excellent exploration potential” said Glen Van Treek, chief executive officer of Paramount.
Paramount also recently signed a pact with Nevada Select Royalty to buy the Frost Project, a 900-acre parcel about 12 miles west of Grassy Mountain site.
The Frost project, Van Treek said, isn’t developed but shows promise for gold that brought his company to Malheur County in the first place.
“We believe that there is excellent potential to find a deposit similar to Grassy Mountain,” said Van Treek.
The two moves by Paramount signal a long-term investment in Malheur County. That has been the plan from the start, said Van Treek.
“As soon as we acquired (Grassy Mountain) we started working around the project. We want to consolidate all of the ground,” said Van Treek.
The Cryla LLC claims are owned by an Alaskan family, Van Treek said, and were staked more than 20 years ago.
“Our claims surround their claims. Those claims are good. They are close to the infrastructure (at Grassy Mountain) with some exploration potential,” said Van Treek.
Van Treek said Paramount discovered the claims as it was preparing the Grassy Mountain project.
“It took us a while to find the people who actually owned the claims. None of the companies who owned Grassy Mountain ever approached them. So, we will do some work and see what is there,” said Van Treek.
The deal with Cryla LLC is fairly standard in the mining business.
Paramount will pay $40,000 a year for two years to Cryla LLC and then $60,000 a year for two more years. Then, Paramount can buy the claims for a little over $500,000.
The Frost option deal is cheaper - $250,000 over four years – and Paramount must pay a two percent royalty if it mines mineral deposits there.
Van Treek said based on data collected by Nevada Select Royalty in the 1990s, each site has promise.
“They had several really interesting gold intersects. We really like that one,” said Van Treek. “We did a helicopter survey that gave us how the rocks look and a biometric survey which look for minerals,” said Van Treek.
Both sites, he said, are also convenient. The Cryla LLC claims are next to the Grassy Mountain mine site.
The Frost Project is close enough to Grassy Mountain that trucks can haul ore to its proposed processing facility.
“We wouldn’t need to build another processing plant. We can just mine it and truck it to Grassy Mountain,” said Van Treek.
Van Treek said both deals are full of potential.
“Anything we can find, it can increase the life of Grassy Mountain. And we don’t have to find a huge find,” said Van Treek.
The next step, said Van Treek, will be to gather soil and rock samples.
“The first stage will be a few months. Certainly, we will drill but how much I don’t know. Both sites have the potential for gold and silver,” said Van Treek.
Extensive mining on the new sites requires new permits from the state and federal government. However, Van Treek said the process should be shorter because neither site will contain a processing plant like Grassy Mountain.
“It won’t involve any chemicals,” said Van Treek.
Van Treek said Paramount doesn’t plan to leave Malheur County any time soon.
“We’ve spent a lot of money – so far probably close to $10 million – so we might as well make it happen,” said Van Treek.
Also last month, Paramount announced it received approval from regulators for more exploratory drilling at Grassy Mountain and several areas near the proposed mine.
Now, Paramount is wading through a state permitting process before it begins construction of the underground mine and complex at Grassy Mountain.
Plans at Grassy Mountain call for mineshafts about 13 feet tall up to 15 feet wide that zigzag down 35 levels more than 700 feet below the high desert.
Paramount plans to use a “carbon in leach” process to separate silver and gold from ore at Grassy Mountain. In this process, cyanide solutions dissolve the gold and silver from the rock. The company said the leaching process would be done inside tanks in an enclosed processing plant.
Once running, the Grassy Mountain mine will operate 24 hours a day, seven days a week and create more than 100 well-paying jobs. The mine was projected to produce up to $60 million a year in profit, but that figure doesn’t include any potential from the new sites.
Reporter Pat Caldwell: [email protected] or 541-473-3377.