Sagebrush Gold Ltd. will take another stab at getting a gold project 15 miles northeast of Lovelock back into production.
The company headquartered at Walnut Creek, Calif., said last week it acquired the Relief Canyon gold project from lenders who'd taken the property back after the bankruptcy filing of the mine's previous owner, Firstgold Corp.
Details of the transaction weren't disclosed.
Firstgold spent $16 million over two years to develop ore-processing facilities at Relief Canyon, ran out of money, and tried to raise money from Chinese investors. But the U.S. government shot down that deal, saying it had national security worries because the mine is close to facilities of the Fallon Naval Air Station, and Firstgold filed for bankruptcy protection in early 2010.
Pegasus Mining produced about 100,000 ounces of gold from the property from 1986 to 1990, when low gold prices forced it to close the operation. Geologists who have studied the property say they believe there's the potential to produce at least 155,000 additional ounces of gold.
Barry Honig, chairman of Sagebrush Gold, said the work that Firstgold completed at the property should help Sagebrush move into production fairly quickly. And he said the company will begin a exploration program to get a better understanding of the potential gold resource on the property.
Publicly held Sagebrush, which was known as The Empire Sports & Entertainment Holdings Co. before it got into the minerals business this year, also is exploring two properties in the Battle Mountain area.
