Borealis Mining (TSX-V: BOGO) has acquired Gold Bull Resources (TSX-V: GBRC; US-OTC: GBRCF) and its Sandman project in Nevada, marking a significant step toward becoming a mid-tier gold producer.
Borealis’ adsorption, desorption, and refining (ADR) plant is already producing doré bars from leached material, making the Gold Bull acquisition a strategic move. With its existing infrastructure, Borealis can process Sandman’s oxide ore efficiently, said company president and CEO Kelly Malcolm.
“Gold Bull fits perfectly into our M&A strategy,” Malcolm stated. “There are many projects like Sandman with resources under 1.5 million ounces—often where major producers start to take notice.”
Malcolm highlighted the strong preliminary economic assessment (PEA) of Sandman, noting its high internal rate of return (IRR) and attractive net present value (NPV) relative to the acquisition cost. “If we can integrate several similar acquisitions, we can build a formidable company,” he added.
The deal has attracted major industry figures, with mining veterans such as Bob Buchan, founder of Kinross Gold (TSX: K, NYSE: KGC), joining Borealis’ board, while high-profile investors Rob McEwen and Eric Sprott have taken significant stakes in the company.
Sandman Project Highlights
The 2023 PEA for Sandman outlines an impressive post-tax IRR of 81% and an NPV of $121 million (C$173.1 million) at a 6% discount rate, based on a gold price of US$1,800 per ounce. The estimated initial capital expenditure (capex) is US$31.5 million, with a post-tax payback period of just 1.3 years. The project forecasts an annual gold production of 37,900 ounces over a nine-year mine life, using heap leach processing with loaded carbon transported off-site to an ADR facility.
“While Sandman was viable at $1,800 per ounce, raising pre-production capital was a challenge for Gold Bull,” Malcolm said. “This merger allows us to unlock its full potential, maximizing value well beyond what either company could achieve independently.”
Gold Bull’s NI 43-101 resource estimate from January 2021 reported 18.6 million tonnes of indicated resources grading 0.73 g/t gold for 433,000 ounces, with an additional 60,800 ounces in the inferred category.
Borealis is acquiring Gold Bull’s outstanding shares through a share exchange at a ratio of 0.93 Borealis shares per Gold Bull share, translating to an acquisition cost of approximately $14 per ounce of gold resources.
History and Future Prospects
Sandman was previously held by Newmont (TSX: NGT; NYSE: NEM), which conducted extensive drilling and baseline environmental studies. Gold Bull acquired the property in 2020 for US$4 million. The project consists of four near-surface deposits, with about two-thirds of the 494,000-ounce gold resource being oxide mineralization, ideal for heap leaching.
“Newmont’s metallurgical studies suggest even the deeper sulphide mineralization is non-refractory, which means it could potentially be heap leachable,” Malcolm said. Borealis plans to confirm this through additional testing.
The feasibility study for Sandman is a priority, with production targeted as soon as permitting is secured. Malcolm anticipates that the necessary approvals could be obtained within 18 to 24 months.
Beyond Sandman, Gold Bull’s portfolio includes the early-stage Big Balds project, located near Kinross Gold’s Bald Mountain mine. While it presents intriguing exploration potential, Sandman remains the primary driver of the acquisition.
Borealis Growth Plans
The Borealis mine itself has a long history, with gold production dating back to 1978. It has yielded over 500,000 ounces from multiple open-pit oxide deposits. More recently, it produced 125,000 ounces between 2011 and 2013 under Toronto-based Gryphon Gold and Waterton Global Resource Management. Borealis acquired the project in April 2023, making it one of the few junior miners with a permitted, revenue-generating operation under a $100 million market cap.
In January, Borealis reported 550 ounces of gold production from residual leaching and is now preparing to crush, stack, and leach a 330,000-tonne stockpile grading about 0.5 g/t gold. “This should significantly boost our gold yield this year,” Malcolm noted.
Plans are also underway to restart full-scale mining operations later this year, though further guidance is pending. The historic 2011 resource estimate by Gryphon Gold identified 1.83 million ounces of measured and indicated gold resources at 1.28 g/t and an inferred resource of 195,000 ounces at 0.34 g/t. Borealis intends to update this estimate following confirmatory drilling.
Drilling at the Graben historical gold deposit has shown promising results, including intercepts of 2.25 g/t gold over 99.1 meters and 4.06 g/t over 21.3 meters. Additional exploration will be conducted this summer.
With its 54.4-sq.-km land package, Borealis sees potential for new gold discoveries beyond known resources. The site boasts well-developed infrastructure, including an ADR facility, multiple open pits, a mobile equipment fleet, permitted heap leach pads, and waste rock facilities.
Following this acquisition, Borealis is actively seeking further opportunities in Nevada and possibly in neighboring states that align with its growth strategy. “The Gold Bull and Sandman deal is just the beginning,” Malcolm concluded.
