Submitted by Mike Anthony as part of our
Valor Gold (
3,000 acres and 148 unpatented lode mining claims from Paramount
Gold & Silver (
). The project's name is Reese River, and it is strategically
located near the Battle Mountain Cortez Eureka mineral belt. Reese
River adjoins one of Valor Gold's major projects, Red Rock. Valor
Gold paid with 6 million of its own shares, thereby making
Paramount an 8% owner in Valor Gold.
This deal is pivotal for Valor Gold for three main reasons.
First, Valor Gold not only acquired valuable land and additional
mining claims, but it also received a vote of approval from a large
neighboring company. Second, the project increases Valor Gold's
exploration area within a significant gold region. Finally, the
consolidation of land makes Valor Gold more attractive for
acquisition by one of the larger gold producers in the area, such
as Allied Nevada (
), Barrick Gold (
), and Newmont Mining (
Paramount Is a Partner With a Vested Interest, Not a
Paramount's sale of its
Reese River project
is not an asset disposal in any sense. Valor Gold acquired the
project in exchange for giving Paramount an 8% equity stake and an
option for one director nomination. Paramount maintains a vested
interest in the property and will self-evidently support Valor
Gold's efforts to increase the property's value.
Currently, Valor Gold counts two gold exploration companies as
partners that both have significant land packages: Paramount and
Pershing Gold (PGLC). Having access to these nearby gold companies
strengthens the position of Valor Gold. Additionally, there is
strong overlap between the shareholders of Valor Gold and these
While many exploration companies fail due to financing problems,
another common reason for failure is inability to advance the
company beyond the exploration phase toward actual production.
Fortunately, Valor Gold already has a management team with
extensive experience in driving companies toward actual production.
For example, Arthur Leger leads Valor Gold, an executive with years
of experience in the mining industry, having served as a geologist
at Pershing Gold, Nevada Gold Holdings, Snowstorm, and Gold Banks
Recall that Paramount now has the right to nominate one board
director to Valor Gold. A couple possibilities for this nomination
include Eliseo Gonzalez-Urien, a veteran exploration geologist with
decades of exploration experience and senior posts at major
producers like Placer Dome (now Barrick). Another Paramount
geologist who could be nominated is John Carden who discovered a
major gold deposit in White Pine County, Nevada during his tenure
at Echo Bay (currently part of Kinross Gold).
Valor Gold Increases Its Exploration Area and
Prior to the Reese River acquisition, Valor Gold owned two
1. North Battle Mountain: encompassing 1,520 acres and 72
unpatented load mining claims where drill targets have been
2. Red Rock: located at a crossroads of three proven gold
trends: Caetano Caldera, Rabbit Creek, and Battle Mountain Eureka
Gold. Valor Gold's Reese River project is adjacent to Red Rock and
will increase Valor Gold's land holdings by over 30% (3,000 acres).
Red Rock is situated on 5,600 acres, and Valor Gold has ownership
of 269 unpatented lode mining claims. Importantly, the Reese River
project proximity to a water source, making this region attractive
for gold miners. (Water is important in the gold cyanidation
process, which is the most common way of extracting gold from
In addition to an attractive geography, the Reese River project
is 7.5 miles east of the McCoy-Cove open pit gold mine (originally
developed by Echo Bay) and 15 miles northwest of the Phoenix mine
in the Battle Mountain district. According to a technical study
completed in 2006 by X-Cal, the predecessor of Paramount in the
Reese River project, all random samples of soil contained gold.
Prior to X-Cal, Placer Dome and Barrick Gold had already explored
for gold in the Reese River area, confirming X-Cal's recommendation
for a more extensive drilling program.
Valor Gold Emerges as an Attractive Acquisition
Following the acquisition of Reese River, Valor Gold is now a
more significant gold exploration company and thus more likely to
attract interest from a major producer. Possible suitors in Nevada
include Barrick Gold, Newmont, Allied Nevada, Agnico-Eagle Mines,
and Coeur d'Alene Mines. Valor Gold's proximity to water may even
make Valor Gold an attractive target for a newcomer to Nevada's
The recent acquisition of Reese River by Valor Gold is a
strategic move and advances the company to the next stage of its
corporate life. Within its first year as a corporate entity, Valor
Gold is rapidly positioning itself to become a large player in this
key area of Nevada. The company has also aligned itself with
friendly neighbors who can help it to advance its exploration
projects. Finally, Valor Gold is reaching a size that could attract
the attention of a mid-tier or major gold miner in Nevada.
Investors looking to invest in a junior gold exploration company
might want to consider the prospects and
of this unique company.