Goldwedge mill facility. Credit: Scorpio Gold
Nevada-focused Scorpio Gold (TSXV: SGN) says it has received an C$8 million ($5.8m) investment from Canadian mining entrepreneurs Ross Beaty and Eric Sprott to advance its flagship Manhattan property.
The investment comprises the issuance of 32 million common shares priced at a discount of C$0.25 apiece. Beaty, who founded Pan American Silver (TSX: PAAS) in 1994 and is the current chairman of Equinox Gold (TSX: EQX), bought 20 million shares, while billionaire investor Sprott placed an order for 12 million.
Scorpio Gold rose by nearly 15% following the announcement. By 10:30 ET, the stock traded at C$0.38 a share — its highest in over two years — with a market capitalization of approximately C$73 million ($53.1m).
The proceeds, the Vancouver-based gold junior says, will be used for exploration and development activities at Manhattan. The property encompasses the Goldwedge mine, with a 400-tonne-per-day mill, and four past-producing pits that were acquired from Kinross in 2021.
Late-stage exploration project
Scorpio considers the consolidated Manhattan district property, covering 47.8-sq.-km, as a “late-stage exploration opportunity” with over 100,000 metres of historical drilling and significant resource potential. It also noted that the land package is about 16 km south of Kinross’ Round Mountain mine.
Goldwedge is a fully permitted underground mine project with over 600 metres of excavation. Drilling to date has outlined mineralization over a 335-metre strike length and to a vertical depth of over 150 metres.
The former Kinross projects have a history of production dating back to the 19th Century. The Reliance mine produced around 59,000 tonnes grading 12.3 g/t gold between 1932-1941, while the Manhattan Mine East & West pits outputted 236,000 tonnes during 1974-1990.
To supplement historical data on the projects since production ended, Scorpio kicked off a Phase 1 diamond drill program in June, targeting three main areas: the Gap Zone sandwiched between the historic Goldwedge and West Pit mines, the Zanzibar Trend connecting Goldwedge to the third target zone, and Mustang Hill’s historic underground mines.
“Previous operators have failed to consolidate the Manhattan claim package, leaving areas such as the Gap Zone, connecting the West Pit to the Goldwedge mine untested,” Harrison Pokrandt, Scorpio’s VP of exploration, stated in a June 20 news release. “This situation has now been resolved, just one of the factors that now allow Scorpio to fully unlock the potential of the district.”
Focus on Manhattan district
To focus solely on exploring the Manhattan district, the company last month sold its other project in Nevada, the Mineral Ridge in Esmeralda County, to a third party for $7.5 million.
CEO Zayn Kalyan said the sale would enable Scorpio to focus its financial and strategic resources on the Manhattan district and deploy the proceeds directly into unlocking the value of what it believes is a “highly prospective, underexplored asset in a Tier 1 jurisdiction.”
“With the large amount of historic workings and past-producing assets on the property, and Kinross’ Round Mountain gold mine just 15 km to the north, on the north side of the Manhattan Caldera structure, I believe Manhattan has the potential to become a multi-million-ounce gold asset,” Kalyan stated in an earlier release.
While it completes the drilling, the company plans to publish an initial resource for Manhattan in the third quarter of 2025 incorporating some of the new results, and then look to expand the resource going into next year.
