South Cresson gold mining pit just above the City of Victor
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A southern view from the South Cresson gold mining pit just above the City of Victor.

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Newmont Mining Corporation’s Cripple Creek and Victor (CC&V) gold mining operation’s quarterly update presented last month to the Cripple Creek City Council revealed information on the underground gold mining exploration, current surface operations, along with commentary on proposed mergers and ventures on the corporate side.

General Manager Mike Schaffner said gold production is steady, and anticipates an approximate 360,000 troy ounces of gold to be mined in 2019, a slight increase over 2018.

Regarding the company’s venture into underground exploration for gold, Schaffner said the company has hired six full-time employees in preparation for the different mining style.

The expansion of CC&V mining into an underground phase could extend gold production past the current 2026 life expectancy of the surface operation phase, with a possible $200 million investment by corporate management, said Schaffner.

According to Schaffner, the historic and highly productive Vindicator mine had stopped mining operations at 8,000 feet after hitting water at 7,000 feet.

With new technology and the ability to delve deeper, “We are very certain we are going to find ounces; The more we look at it, the better it gets,” Schaffner said of the underground exploration efforts.

Underground exploration is projected to originate at the rim of the Cresson mining pit and venture along a “vertical exploration decline,” which will allow teams to sample from a cross-section of potential targets, according Schaffner.

Schaffner touched on the proposed $10 billion Newmont buyout of Goldcorp which has been in the news recently and would potentially increase assets to make Newmont the largest gold company in the world.

However, Schaffner reported that, in the process of Newmont’s pursuit of Goldcorp, an unsolicited proposal from Barrick Gold Corp. in Nevada and ultimately rejected by Newmont, has placed the proposed Goldcorp merger in limbo for the time being, and spurring a possible joint venture with Barrick in Nevada.

According to a March 4 Kitco News article, Newmont had plans (announced mid-January) to “take over Goldcorp in a mostly all-stock transaction to create the largest gold company in the world.”

The same Kitco article (with updates) states that Newmont’s board of directors decided that “(Barrick’s) ... unsolicited, all-stock proposal to acquire Newmont, “is not in the best interests” of Newmont’s shareholders; however, the company has proposed a joint venture with Barrick for Nevada operations, officials say.”

Newmont’s Chief Executive Officer Gary Goldberg, in a prepared statement, is quoted in the Kitco article: “Our thorough review of Barrick’s unsolicited proposal and its associated risks has reaffirmed our conclusion that the combination of Newmont and Goldcorp represents the best opportunity to create value for Newmont’s shareholders and deliver industry-leading returns for decades to come.”

Schaffner said the joint venture proposal is expected to see several more twists and turns, though it is not expected to impact the Cripple Creek and Victor daily operations, but CC&V could possibly see a different management style if the venture were to come to fruition.

As of Friday, the price for gold is $1,293.08 per troy ounce and Newmont stock (NYSE: NEM) is trading at $36.24 per share.

Schaffner also reported on CC&V’s most recent surface mining endeavors; Schist Island and Globe Hill, which border Cripple Creek and the Cresson and South Cresson mining pits bordering Victor.

The blasting schedule will be modified to accommodate seasonal changes due to increased tourist activity and attractions including the Mollie Kathleen Mine and the CC&V Railroad.

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