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(Kitco News) Mackay Gold & Silver has started its first major drill program in Nevada’s Comstock District, launching a 20,000-meter campaign that will test the Occidental-Brunswick Lode, a structure the company says has seen limited systematic modern exploration.
The company announced on June 29 that drilling had begun at its 100%-owned Comstock District property. The Phase 1 program is focused on the Occidental-Brunswick Lode, a multi-kilometer structure that runs parallel to the historic Comstock Lode.
Mackay said the program marks the first large-scale, systematic exploration drilling along the Occidental-Brunswick Lode. It follows the company’s recent initial public offering and $60 million financing, which gave the newly listed explorer capital to drill while continuing to consolidate ground in one of the best-known mining districts in the United States.
Speaking with Kitco Mining on July 2, CEO and Director Darwin Green said Mackay came to market at a favorable time despite volatility in gold prices.
“Our timing couldn’t have been better in terms of coming to market,” Green said. “When we put the financing together, we had a tremendous amount of interest.”
The Comstock District is part of Nevada’s Walker Lane trend. Mackay said in its June 29 release that the district produced an estimated 8.2 million ounces of gold and 192 million ounces of silver between 1859 and 1926 from bonanza lodes that averaged 35 grams per tonne gold and 726 grams per tonne silver.
Green said the district remains compelling because much of its mining history dates to the 1800s, while fragmented ownership limited the ability to test the camp with modern exploration methods.
“This is a district that had a very big and strong mining history, but that history was really primarily in the late 1800s,” Green said. “It’s been kind of frozen in time to some degree.”
That consolidation theme is central to Mackay’s strategy. Green said the company has grown its land package by 300% over the past 18 months. According to the company, Mackay has assembled the largest consolidated land package in the district’s history.
“The barrier to exploration has been fragmented land ownership,” Green said.
Green said Mackay now controls the main Comstock, Occidental and Silver City vein structures. He said the latest consolidation transaction added the Silver City lode, historical non-NI 43-101 ounces and a permitted processing facility.
The larger-than-planned financing helped accelerate that strategy. Green said Mackay originally sought $30 million to $40 million, but increased the raise after receiving stronger investor demand. He said Mackay still has more than $40 million USD in its treasury to support acquisitions and drilling.
The Phase 1 program is built around two targets. About 15,000 meters of reverse circulation drilling is focused on near-surface oxide gold-silver mineralization at Occidental South. Another 5,000 meters of diamond core drilling will test the deeper projection of the Occidental-Brunswick Lode near the historic Sutro Dewatering Tunnel.
Mackay said the RC rig arrived on site June 17, while the core rig is scheduled to arrive in early August. First assay results are expected in late summer.
Green said the shallow program is intended to test whether Mackay can outline a meaningful near-surface oxide target over the next 12 to 18 months. He said previous operators drilled the area between 2018 and 2021, with every hole encountering mineralization over a 300-meter zone. Mackay has since completed soil work over about 1 kilometer along trend.
“We’re going to go see if we can fairly quickly frame in one or two million ounces at better than a gram of near-surface oxide mineralization,” Green said.
The deeper program will test whether Occidental-Brunswick can show similarities to the historic Comstock system at depth. Green said the structure is about a mile east of the Comstock, roughly three miles long, and has the same strike and dip as the historic lode.
Mackay interprets Occidental-Brunswick as down-dropped relative to the Comstock, meaning the surface expression may represent the upper part of the epithermal system while stronger gold-silver mineralization could be preserved deeper.
The main historical data point for the deeper target is the Sutro Tunnel, a 4-mile drainage tunnel built in the late 1870s. Mackay said the tunnel reportedly crossed a 30-meter interval of the Occidental-Brunswick Lode at a vertical depth of about 450 meters. The interval was described historically as mineralized but below the cutoff grade at the time. The tunnel is no longer accessible and has not been drill-tested.
“Does it have these bonanzas at depth? We’re going to go targeting those,” Green said.
Mackay is also emphasizing its Nevada and Great Basin technical bench. Green said directors and advisers including Moira Smith and Jeff Pontius were brought in to help guide the exploration strategy. He said the company is also thinking about infrastructure and future processing locations early, rather than waiting until after a discovery.
Near-term catalysts are expected to come from drilling. Green said first results are expected in late August or early September, with steady results possible through the rest of the year and beyond. He also said the company may complete additional land transactions.
“We’ve got enough cash in the bank that we can just keep on drilling for a couple of years here, based on positive results,” Green said.
For Mackay, the next year will test whether the first large-scale modern drill program along Occidental-Brunswick can support the company’s view that the Comstock District still has meaningful gold and silver potential. The first results from near-surface RC drilling and deeper core testing around the Sutro Tunnel will determine how quickly the district-scale thesis can advance.
“It’s time to let the drills do the talking,” Green said.
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This article/video was produced with support from a Kitco sponsor. The views expressed in this content do not necessarily reflect the views of Kitco Metals Inc. Kitco does not endorse or recommend any company, security, investment product, or investment strategy. This content is for informational purposes only and should not be considered investment advice.
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