Paramount bags Oregon gold mine in $11.5M deal
Shareholders in Calico Resources (TSXV:CKB) enjoyed a hefty bump to their holdings after the company announced it is being bought out by Paramount Gold Nevada (NYSEMKT:PZG). At close of trading on the Toronto Venture Exchange the small-cap stock was up by a third, at 2.5 cents a share, at almost five times regular volumes.
The deal worth $11.5 million will net Paramount Gold Nevada the Grassy Mountain gold-silver project. A 2015 preliminary economic assessment has the prospective mine producing an average 53,000 ounces of gold per year and 82,000 ounces of silver. Calico owns the mineral rights to the site, located in an unpopulated portion of Malheur County consisting of 9,300 acres.
"The board of directors of Calico believes that the proposed transaction will unlock the considerable value in our Grassy Mountain project for the benefit of our shareholders," Paul Parisotto, Calico’s president and CEO, said in a statement. "Paramount has a strong cash position of approximately US$7.9 million (as at December 31, 2015), along with experienced technical and operational leadership able to take the project forward to production and the financial resources needed to complete the permitting process and a feasibility study, work which our Calico team has so ably advanced to this point."
The project reached a couple of important permitting milestones in January. First, the Oregon Department of Geology and Mineral Industries (DOGAMI) determined that the baseline data submitted by Calico is complete and may be used by Calico to support both the consolidated application and environmental evaluation. Second, the U.S. Bureau of Land Management (BLM) determined that Calico’s revised plan of operations at Grassy Mountain is complete.
"Completing the baseline data has cleared a major hurdle in meeting the requirements of the State’s Division 37 Chemical Process Mining Permit for hardrock mines. It is the farthest any major hardrock mining permit has progressed since the inception of the 1993 Division 37 regulations," Parisotto said at the time.
Paramount's flagship is the Sleeper gold project, a former open pit gold producer located off a main highway about 25 miles from Winnemucca, Nevada. The former high-grade gold mine, operated by AMAX Gold Inc. from 1986 until 1996, produced 1.66 million ounces of gold and 2.3 million ounces of silver.