Nevada Gold Corp has entered into a formal option agreement to acquire up to 75 percent interest in the Diamond Jim Mine in Elko County, NV, a former high-producing, high-grade silver, lead and gold mine.

The Elko Daily Free Press reported that the terms of the option agreement include a minimum work expenditure of $120,000 in the first year of the agreement; a minimum work expenditure of $250,000 in the second year of the agreement; a minimum work expenditure of $350,000 in third year of the agreement and a minimum work expenditure of $1.25 million in the fourth year of the agreement.

The Diamond Jim Mine consists of 35 claims. The property lies on the easterly end of the northeast-trending Midas trend, one of Nevada’s several important epithermal gold belts. The Midas trend hosts a number of significant to world-class gold districts such as Midas-Ken Snyder Mine and the Jerritt Canyon Mine. The mines produce mainly from epithermal vein systems favorable for small but profitable high-grade operations and “Carlin-type” sediment-hosted deposits amenable to large-scale open-pit bulk mining, the Elko Daily Free Press reported.

The property covers a portion of the historic Island Mountain mining district which was first prospected in the 1860’s, following discovery of one of Nevada’s largest placer gold districts in streams draining the area. Veins containing silver, lead, zinc, copper and gold were discovered in 1934. At the mine silicified thrust faults and selected stratigraphic zones are hosts to high silver-lead values with strong indications for gold occurring in some subordinate flanking structures.

The gold potential of the property was first recognized by Columbus Gold in 1984 that completed underground mapping, sampling and a small drilling program. The drilling program intersected interesting silver and gold values in several zones of what appear to be both structurally and stratigraphically controlled silver, lead, zinc and gold mineralization.

Nevada Gold’s immediate business plan is to further explore and evaluate the property for potentially richer deposits that might be exploited in the current climate of high precious metal prices.