“The geological setting being defined in the Eureka district is truly the most unique I have witnessed in my career,” Ewan Downie, CEO of i-80, stated in a news release.
“In the immediate area surrounding the Archimedes pit, we have identified oxide gold, Carlin-type refractory gold, base metal skarn and polymetallic carbonate replacement mineralization. Older mineralizing events are often overprinted by Carlin-type mineralization resulting in precious metal rich deposits not found elsewhere in the Great Basin. We have intersected high-grade mineralization in every one of our targets tested in 2022, all of which remain wide open for expansion,” he noted.
Downie also highlighted that the expanded property has “the potential to host a world-class polymetallic deposit with enhanced potential for further discoveries.”
As consideration, Paycore shareholders would receive 0.68 of an i-80 common share for each share held, representing a 36% premium based on the 20-day volume-weighted average price for both Paycore and i-80 for the period ended on February 24, 2023, and a 26% premium based on the closing prices of both companies on February 24.
Upon completion, existing i-80 shareholders will own approximately 90% and former Paycore shareholders will own approximately 10% of the combined company.
“The consolidation of the core part of the Ruby Hill district will allow i-80 to aggressively pursue the optimization of the company’s multi-year development plan – to create one of the largest US-focused diversified mineral producers,” Matthew Gollat, EVP of i-80, added.
“Step-out drilling results from Paycore’s 2022 drill program confirm the upside potential of what we believe to be one of Nevada’s highest-grade undeveloped deposits that will benefit from the Ruby Hill processing infrastructure,” Gollat said.
Prior to the discovery of Carlin-type mineralization by Homestake at Ruby Hill in the 1990s, the Eureka district enjoyed a successful 100-year history of production (1864-1966) that resulted in some of the highest-grade historic CRD mines in the world.
The Ruby Hill district reported estimated historical production of 1.65 million ounces of gold at an average grade of 28.5 g/t gold and 39 million ounces of silver at an average grade of 668.6 g/t silver from 2 million tonnes mined, of which 80% is estimated to be from the original Ruby Hill mine on the FAD property.
The FAD deposit is the down-faulted, polymetallic-rich extension of the original Ruby Hill mine and was drilled by Paycore in 2022 – a program that successfully expanded mineralization with multiple high-grade intercepts, including 1.06 g/t gold, 155.5 g/t silver, 22.0% zinc and 1.5% lead over 12.5 metres and 2.03 g/t gold, 231.6 g/t silver, 6.3% zinc and 3.7% lead over 44.8 metres.
Since the 1960s, exploration in the district was focused on the discovery of Carlin-type deposits, and the potential for polymetallic deposits was largely ignored. More than 50-years later, i-80 and Paycore renewed exploration with i-80’s inaugural drill program in 2021 and 2022, respectively, resulting in numerous new discoveries on the south side of the Archimedes pit.
According to i-80, these discoveries confirmed its geological team’s model that the Ruby Hill property could be host to multiple types of mineralization and several large-scale deposits. Geophysical surveys at Ruby Hill have identified highly prospective anomalies that are believed to have the potential to represent additional massive sulphide targets, several of which will be the tested in the 2023 program.
The Ruby Hill property is one of i-80’s primary assets and is host to the core processing infrastructure within the Eureka district of the Battle Mountain-Eureka trend including an idle leach plant, an active heap leach facility, and is host to multiple gold, gold-silver and polymetallic (base metal) deposits.
i-80 has submitted for approval its plan to develop an underground mine at Ruby Hill with mineralization accessed via a ramp from the Archimedes open pit. Work is also progressing for the completion of updated mineral resource estimates (gold and polymetallic zones) and an initial economic study for the gold zones (only).
Shares of I-80 Gold rose 1.8% by 12:10 p.m. ET following the acquisition and land expansion in the Eureka district. The company has a market capitalization of C$776.7 million. Paycore Minerals’ stock gained 2.9%, with a market value of C$59.2 million.