Silver King Mines Inc. and Pacific Silver Corp. of Salt Lake City have exercised an option to enter into an equal joint venture with Nerco Minerals Co. to explore and develop about 35 square miles of Nerco gold mining claims and leases in north central Nevada.

Dan S. Bushnell, chairman and chief executive officer of the two Salt Lake companies, said the properties are in the Shoshone Mountains southeast of Battle Mountain, Nev. They are located on the Battle Mountain-Eureka gold belt line, an area that includes seven other major gold-producing operations.Stuart R. Havenstrite, president and chief operating officer of Silver King, said Nerco, headquartered in Vancouver, Wash., explored the property in the last two years and employees identified 100,000 ounces of gold reserves in the Elder Ridge area.

The three companies have budgeted $500,000 for development drilling at Elder Ridge and another $500,000 will be spend on expanded drilling on the remainder of the property. Havenstrite expects the Elder Ridge property to be in production in one year.