Canadian Mining Journal


GOLD: Columbus Gold plans spin-out of US projects

VANCOUVER — Columbus Gold is hoping to unlock “unrecognized value” within its extensive portfolio of U.S. precious metal prospects.

The company recently announced dates for the pending spin-out of Allegiant Gold, which will inherit 14 “drill-ready” properties across Nevada, Arizona, New Mexico and Utah.

Columbus shareholders will be entitled to receive one Allegiant share for every five shares held. The spin-out is expected to occur by Dec. 11.

Furthermore, Columbus is pursuing a $12-million private placement to underpin the deal. Allegiant reportedly wants to drill 10 projects within 12 months of listing under the leadership of president and CEO Andy Wallace.

“We’re naturally very focused on Latin America and the Guiana Shield,” explains Columbus CEO and chairman Robert Giustra (who will also serve as chairman on Allegiant’s board of directors) during an interview. “And we don’t believe the U.S. assets are being recognized by the market. Given that’s not particularly unusual when you have a five-million ounce gold deposit advancing toward production, but there’s clearly a history of success across our business in terms of unlocking that value through this type of deal.”

Reverse-circulation (RC) drilling at the Bolo property in Nevada in 2017. Credit: Columbus Gold.

Columbus has a 45% interest in the Montagne d’Or deposit in French Guiana alongside Nordgold(LON: NORD), which holds the remaining stake. The companies released a feasibility study (FS) on the project in early May that outlines an open-pit mining operation that would produce 2.57 million oz. gold over 12 years.

Meanwhile, Columbus has been advancing the Eastside and Bolo gold discoveries in Nevada, which will immediately become Allegiant’s flagship projects.

The 67 sq. km Eastside property sits 32 km west of Tonopah and hosts pit-constrained, inferred resources of 35.8 million tonnes of 0.63 gram per tonne gold equivalent for 721,000 contained oz.

Gold mineralization at the project reportedly displays many “classic low-sulfidation epithermal features.” It occurs near, and is associated with, the contact of an altered Tertiary rhyolite dome and the surrounding tuffs and volcaniclastic rocks intruded by the dome.

Bolo is a Carlin-style target approximately 60 km northeast of Tonopah. The property made headlines in 2013 when Columbus cut 132 metres of 1.3 grams gold from surface in hole BL-38.

The company recently completed 14 reverse-circulation (RC) drill holes at the site, and expects assays to be released following the Allegiant spin out.

“The unique situation here is that you have two advanced projects that are much closer to potential mine scenarios. The remainder of the portfolio is ‘discovery opportunities’ assembled by Andy and his team,” Giustra elaborates.

“We’ve been in a relationship with him for over a decade and he’s led our U.S. exploration group. The major difference is that Andy has agreed to become the president of Allegiant, which I think is a major endorsement based on his track record,” he adds.

Columbus has scheduled a shareholder meeting on Nov. 27, which would permit Allegiant to begin trading on the TSX Venture Exchange by early December pending regulatory approvals.