Meadow Bay Gold (TSE:MAY) is making great strides in proving up the potential of its Atlanta Gold mine in the USA.
Newsflow has been plentiful in recent weeks and looks set to continue as 2013 gets underway proper as the firm continues to develop "its golden opportunity" in Nevada.
The shares have also perked up since the beginning of the new year - more than doubling in value from around C$0.25 although it has now pulled back to around C$0.39.
A highlight already of 2013 has been a new NI 43-101 resource estimate for the project based on 2011 and 2012 drilling, which has doubled gold ounces.
There are now 572,100 ounces of the yellow metal in the higher measured and indicated category, and 544,300 ounces of gold in inferred.
That compares with the estimate in July last year, of 375,869 ounces in indicated and 166,141 ounces of inferred.
It also contains 5.8 million ounces of silver in measured and indicated and 3.9 mln ounces silver in inferred.
This resource update comes as the firm's 2012/13 exploration is already underway and is in the process of permitting for the Western Knolls area.
The project lies in Lincoln County, Nevada, in the Atlanta mining district where gold is thought to have been first discovered in the 1860s.
The site still benefits from power, water and roads and between 1975- 85 it produced between 110,000 of the yellow metal and 800,000 ounces of silver as an open pit.
A number of companies have been linked to the project, including Gold Fields Resources (NYSE:GFI) and Kinross Gold (TSE:K), which proved up a non-compliant resource of some 464,479 ounces of gold and almost four million ounces of silver.
It came into Meadow Bay's hands when a deal was struck in 2011 and it bought the property for US$6 million in cash.
Since then the company has been busy setting about expanding its footprint from 1,000 acres to around 12,000 by acquiring neighbouring concessions.
Exploration drilling in 2011 confirmed historic holes and importantly marked the firm's discovery of the Atlanta Gold porphyry (a large mineral deposit with a system structure) near the historic mine.
This was significant because it represented a different target from the gold-silver mineralisation found within the Atlanta Fault and added to what the company already believed - that the Atlanta mine was just one of many targets in the district.
The latest programme began in November last year - focusing on infill drilling of the widely spaced holes undertaken in 2011 and step out drilling to the north west of the historic pit in a bid to find a second gold hosting system.
And to date the results look good.
In December last year, the firm unveiled significant assays, including 2.12 g/t gold and 5.3 g/t silver over a width of 35.06 metres and an intersection of 9.15 metres at 6.21 g/t gold and 15.8 g/t silver.
The project received a further thumbs up in January as the Bureau of Land Management gave its exploration plan the environmental 'green light' and set a reclamation bond - marking another milestone in the project's journey towards production.
Drilling, which allows for an additional 69 exploration drill pads mainly in the Western Knolls area, is expected to begin this summer, the firm has said.
This area of the site has never been drilled but the firm says it represents a large and "attractive" untested target.
The location of the Atlanta Gold project itself is unique for a project at this stage of development in that it already has a 15-mile electrical line to the site, water and accommodation onsite.
Nevada, meanwhile, is one of the most accommodating mining jurisdictions in terms of security of tenure and the co-operation provided by the local authorities, according to chief executive Robert Dinning.
He says the discovery of asecond porphyry would catapult Atlanta even further up the value chain.
“If this is the case (and we have a second porphyry) then we have huge upside from historical and current information available,” he previously told Proactive.
He also revealed that the group had received tentative approaches from companies possibly interested in partnering the project.
Where smaller miners might look at gold resources starting around the one million ounce mark, the economics of the industry heavyweights mean they would only consider opportunities of two to three million ounces and above.
The firm is targeting increasing the resource base to rise to at least 2 mln ounces depending on the extent of drilling this year.
Analysts have already pointed out that proving up between 2 and 3 million ounces could lead to a significant re-rating based on an in-the-ground gold valuation of US$50-100 an ounce.
Even on the most conservative assumptions there is significant upside on the company’s current market capitalisation of C$40 million, or US$1 a share, they have said.
