RNC sees tidal wave of Beta Hunt buying interest

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Geologist Lachlan Kenna, air-leg miner Henry Dole, mine foreman Warren Edwards and senior geologist Zaf Thanos with large gold specimens found at the Beta Hunt Mine. Source: ABC Goldfields-Esperance: Jarrod Lucas.

RNC Minerals [RNX-TSX] is seeing a “tidal wave” of interest from prospective buyers following a spectacular-looking gold discovery at the Beta Hunt mine site in Australia, said RNC CEO Mark Selby.

“There’s been a massive amount of interest, which is great because we always believed Beta Hunt had a massive amount of potential,” he said during an interview with The Western Australian newspaper.

Selby was interviewed after approximately 9,250 ounces of high-grade gold was recovered over the past week from a 130-tonne cut on the mine’s 15 level. That is equal to over 70 oz/ton or 2,200 grams/tonne).

The company said the high-grade (coarse gold and large gold-containing specimen stones), includes approximately 190 kg of specimen stone, the largest of which is 95 kg with an estimated gold content of 2,440 ounces and a second large specimen stone of 63 kg with an estimated gold content of 1,620 ounces.

“Again pulling out 9,000 ounces of gold from a small cut at an average grade of 2,000 g/t and to pull out 2,000-ounce boulders of gold doesn’t happen very often,” Selby said.

Huge interest in the discovery is reflected in Tuesday’s stock market activity. On the TSX, RNC shares jumped 77% or 13.5 cents to 31 cents on volume of 38.2 million. RNC was by far the most active stock on the TSX.

RNC is headed by a group of former executives of the nickel giant formerly known as Inco Ltd. The Canadian mining icon and its Sudbury, Ontario operations were acquired by Vale [VALE-NYSE] of Brazil in 2006.

The company’s principal asset is a 28% stake in a joint venture that owns the Dumont Project, which is located in the Abitibi mining region in Quebec.

RNC has a 100% ownership interest in the producing Beta Hunt gold and nickel mine in Western Australia, as well as a 27% stake in the producing Reed Mine in the Flin Flon-Snow Lake region of Manitoba.

The Beta Hunt Mine, located 600 km from Kambalda, is a deposit with a very rare feature of hosting both nickel and gold resources in adjacent discreet mineralized zones.  RNC’s interest is held through a 100% interest in Salt Lake Mining Pty Ltd. (SLM), a private company. SLM operates Beta Hunt by virtue of a sub-lease agreement with Gold Fields Ltd.

News of the find was received with excitement in Kambalda, a small town with a population of about 2,500, The Western Australian said in its report. It has historically been a nickel mining district and has fallen on hard times in recent years with decade-low nickel prices leading to the closure of many mines.

As a result of the discovery and related developments, RNC is no longer in exclusive discussions with a preferred bidder for Beta Hunt.

“We’re going to look at all the alternatives in terms of whether we look to raise capital at the mine level, whether we look at spinning it out publicly, whether we look at joint venturing with another mining company – this allows all options to be on the table for us,” he said.

RNC said it is the first owner of the Beta Hunt Mine to focus on deeper drilling in the Lunnon Basalt in its search for gold, and therefore the first owner to discover and mine gold from newly discovered coarse gold located entirely within the Lunnon Basalt.

Previous bonanza-grade specimen stone occurrences at Beta Hunt were associated with the nickel-sulphide bearing contact between the Lunnon Basalt and the overlying Kambalda Komatite, where nickel mining has been the focus of RNC and previous owners.

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Filed in: Gold, Resources

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