Garrett Says Hycroft’s High-Grade Finds Changes Outlook
‘This is not the Hycroft you used to know’
Hycroft Mining Holding Corporation (Nasdaq: HYMC) president and CEO Diane Garrett believes recent high-grade discoveries made by the company has the potential to transform the future of its namesake project in Nevada.
The large, low-grade Hycroft project was discovered in the 1980s and has a chequered history of on-and-off heap leach production over the past 40 years.
Acquired out of bankruptcy by Hycroft in 2015, the project most recently produced at a small scale between 2019 and 2022.
“This is not the Hycroft that you used to know,” Garrett declared at last week’s Mining Forum Europe in Zürich.
“We have come into what’s always been known as a world-class asset, but low-grade, and we have turned it into something extremely amazing.”
Hycroft’s recent focus has been exploration.
“We were drawn to this company because we recognised there was an opportunity to find out what was feeding this massive resource, and by doing two years of meticulous technical work we have discovered not one, but two, very, very high-grade silver systems,” Garrett said.
“We’re now finding high-grade gold, and the story is just beginning and evolving.”
Brimstone and Vortex
Despite its long history and large resource, Hycroft estimates less than 10% of the project area of 64,000 acres has been explored.
The high-grade Brimstone deposit was discovered in late 2023.
“So, when we talk about high-grade, what do we mean? Well, our discovery hole, the best hole ever drilled in the 40-year history of Hycroft, was 85m of over 500 grams of silver,” Garrett said.
“Then we drilled the best hole ever again, and that was 21m of 2800g of silver.
“That was really spectacular and, in that hole, we had 80,000g intercepts, multi-thousand-gram intercepts, not just over small intervals, but 20, 30, 40, 50m intervals.
“This is staggering for us and for this orebody.”
Earlier this month, Hycroft reported a hit of 3.4m at 304.14g/t silver and 1.33g/t gold, including 7m at 1241.97g/t silver and 6.59g/t gold and a “phenomenal” 0.9m at 2890g/t silver and 33.7g/t gold at Vortex.
“We have never seen that anywhere at Hycroft, so we’re real excited about that,” Garrett said.
In February, Hycroft updated the resource for the project by 55% to 16.4 million ounces of gold and 562.6Moz of silver at 0.33g/t gold and 11.42g/t silver in the measured and indicated categories, as well as 5.03Moz of gold and 132.8Moz at 0.3g/t gold and 7.9g/t silver in the inferred category.
The company also reported an initial high-grade measured and indicated resource of 90.2Moz of silver at 154.7g/t silver for Brimstone and Vortex, as well as 13.3Moz at 125.18g/t silver in the inferred category.
There are still results from the two new discoveries which are yet to be included in the resource.
The company is working on step-out drilling with two rigs on site and another two on the way.
“We’re drilling three times the size of the program we did in our discovery year, so over 20,000m,” Garrett said.
“That’s an indication to you that we think these systems are going to become much larger. They’re still open in all directions and at depth.
“Our focus right now is on these two high-grade systems, but we’ve taken what we’ve learned at Brimstone and Vortex and we’re applying it to other areas and we’re seeing some very interesting things.
“Now we understand what is feeding this massive, low-grade resource and we think that we’re going to see much more potential on the high-grade throughout the district.”
Development plans
Hycroft has a preliminary economic assessment due imminently though it was started prior to the discovery of Brimstone and Vortex.
Garrett said the focus would be on a small, high-grade operation sized at around 3500-5000 tonnes per day.
The company will also assess a restart of the heap leach due to higher precious metal prices.
“We do believe it’s economic, so we’re looking at that as a potential revenue source as we bridge our way to the sulphide milling, and our motto is drill, baby, drill,” Garrett said.
This week, Hycroft appointed engineering consultancy RESPEC Company to review underground mining options at Brimstone and Vortex.
In parallel, the company is evaluating the development of an exploration decline to enable underground drill access.
“Brimstone starts within 30m of the bottom of the Brimstone pit, so very easy access,” Garrett said.
Hycroft already has permits for heap leaching and milling in place.
“We are different from most developers because we have a substantial amount of infrastructure on site,” Garrett said.
“We have a fully operational lab. We have truck shops, maintenance shops, warehouses, admin buildings. We have two processing facilities. We have a rail line that runs right through the property.
“We also have a brand new leach pad that is ready to receive ore because in about the first 20 years of the operation we’ll still be in and out of heap leach material in addition to milling material.”
Hycroft, which is 43% owned by Eric Sprott, has unrestricted cash of US$189 million and no debt.
The repayment of US$125.5 million of debt late last year, combined with exploration success and higher metal prices, saw Hycroft’s market capitalisation rise as high as US$4.5 billion.
The stock is up by more than 1000% over the past 12 months and Hycroft’s market cap now sits at US$3.6 billion.
“This is an evolving, developing story. It has been an amazing discovery,” Garrett said.
“Our share price has reflected that value, but we’ve only just scratched the surface and we have so much further to go.”