Tailings Depth Limits SNX’s Gold Estimate at New Pass—What Risks Lie Ahead?

Historic Tailings Yield Encouraging Gold Grades

Sierra Nevada Gold (ASX, SNX) has reported compelling results from a recent auger sampling program at its New Pass Project in Nevada, USA. The company drilled 66 holes across four historic tailings dams, returning an average gold grade of 1.55 grams per tonne (g/t) from 113 samples. Notably, Tailings Dam 1, the largest and deepest of the four, averaged 1.87g/t gold with individual samples reaching as high as 4.03g/t.

The auger holes were limited to approximately 2 meters in depth due to equipment constraints, but historical records suggest Tailings Dam 1 may extend to 4 meters, indicating potential for additional mineralised material below the sampled interval. The presence of coarser gold-bearing fractions in the tailings also hints at incomplete historical grinding, which could enhance recovery prospects.

Strategic Implications for Processing and Mining

These encouraging grades have prompted SNX to explore tailings reprocessing options as a near-term revenue opportunity. The tailings processing could complement the company’s broader strategy to restart gold production at New Pass, where underground mining targets high-grade veins such as the Superior Vein. Previous drilling of the Superior Vein yielded a standout intercept of 1.22 meters at 26.7g/t gold, underscoring the project’s potential.

SNX is actively advancing permitting efforts to reopen the Superior Mine and has completed planning for underground drilling and bulk sampling programs. The company anticipates that these initiatives will provide critical data to support a phased return to production.

New Pass, A Historically Rich Gold District

The New Pass Project sits within the Austin Trend, a geological corridor parallel to Nevada’s prolific Carlin and Battle Mountain gold trends. Historically, the New Pass mining centre produced gold at an average grade of 17g/t, with approximately 40,000 ounces extracted over its operational history. The project area hosts multiple vein systems and unexplored strike length, offering significant exploration upside beyond the tailings and known veins.

SNX’s recent work builds on decades of exploration and mining activity, integrating modern sampling and assay techniques to unlock value from both historic tailings and underground resources.

Looking Ahead

With tailings sampling confirming residual gold grades and underground targets primed for testing, Sierra Nevada Gold is positioning New Pass for a potential resurgence. The company’s next steps include detailed metallurgical studies on tailings, advancing mine permitting, and initiating underground drilling and bulk sampling to refine resource estimates and mining plans.