Executive Insights

In conversation: The triple safe haven for gold and exploration

In a wide-ranging interview, we talked with Eclipse Gold Mining President & CEO Michael G. Allen on the licence to drill, the triple safe haven for investors in these turbulent times and the premium placed on open pits. Part 2 of 2.

Q: You mentioned having the licence to drill: the permit to fully explore the potential of Hercules. Nevada embraces mining, so what is the distinction.

Michael: Nevada embraces mining but does have clearly stated regulations and stages. Not all companies can openly drill and discover or delineate a resource. Importantly, we have a Plan of Operations permit for doing the level of drilling necessary to define a meaningful gold system. That’s an important consideration to communicate to the market. Our runway is open. We can drive through to our first resource, when appropriate with sufficient drilling, without permitting headwinds.

Q: What makes for a triple safe haven in the gold space?

Michael: Gold is historically seen as a safe haven store of value. I like to think of Eclipse as a triple safe haven in the exploration sector: we are focused on gold; we are operating in Nevada, a state that embraces mining; and our leadership and board have a proven track record in the region. There is for certain a U.S. premium because security of title is paramount.  Nevada has a very significant endowment of gold.  If Nevada was a country, it would be the 8th largest gold producer in the world.  So, the potential is there for a significant discovery. Given the geological potential, established regulatory regime and seasoned mining workforce, Nevada represents one of the safest jurisdictions to make a discovery, and build and operate a mine. 

Q: There is a premium being placed on open pit gold deposits in Nevada and the surrounding states.  Why do you think that has been occurring?

Michael: Comfort level and technical risk are key drivers. As a general rule, open pits are technically less risky than underground. Open pit is less capital intensive. You’re dealing with a big mass and it’s relatively homogeneous and straight forward.  Open-pit heap leach mining is what Nevada is known for and their operating efficiency in terms of grade and all-in costs is extremely competitive. At Hercules, there is an indication of high-grade structures coming together that may coalesce into a starter pit. It’s early days, but our viewpoint is always the larger picture.