NV Gold (NVX.V) has amassed a sizeable portfolio of Nevada-based gold projects over the past few years, and recently added three additional horses to its stable. NVX also attracted Hochschild Mining (HOC.L) as a joint venture partner on the SW Pipe project which means the company should be in a position to release updates on at least four simultaneous exploration programs in its asset portfolio.
We caught up with CEO Peter Ball to discuss the rather disappointing exploration results at Slumber, the new projects and the joint venture with Hochschild.
You recently released assay results from your Slumber drill program which were uninspiring at best. Sure, 18.3 meters of 0.52 g/t gold is encouraging, but that’s not what you were after, right?
I believe anytime you hit gold in a place you weren’t planning is a good thing. We were definitely not looking for low grade, as we were and still are chasing the higher grade at depth at Slumber, but due to the excess water in the holes, our RC rig just couldn’t reach the targets at depth. The low grade actually has attracted attention noting the grade near-surface is actually higher than a local mine in the area. So a couple groups has reached out to ask a few more questions on what we are seeing in the near-surface mineralization we accidentally hit. Zones of low grade can add up to a sizeable resource fairly quickly, so it’s definitely worth following upon.
A bunch of holes didn’t meet the planned depth and were abandoned before reaching their targets due to high volumes of groundwater. How will you deal with the groundwater at your re-try of targeting the CSAMT target?
Yes as mentioned earlier, the RC rig just cant get through the water and reach the depth. We will be using a core rig, which will easily reach the depth.
What are the next steps at Slumber? We noticed your press release mentioned you’ll start Phase 3 drilling after completing additional mapping and soil sampling programs. Why is that necessary, considering you already HAVE your drill target defined?
The mapping and sampling is related to a short program planned for the near-surface oxide zone to help us vector for a few test holes to see if the mineralized zone holds together at surface. If it does, the value of the Slumber project just may increase substantially, but really the priority zone for later this year is the deeper targets where we already know where to drill.
In the early fall, when we get access to a core rig, or sooner, we will punch some holes down and finally reach our target and see if we have another sleeper. Very interesting target that has held us waiting for 2 years to discover.
The Hochschild JV
At the end of April, you announced NV Gold had signed an option agreement with well-respected Hochschild Mining (HOC.L) on the SW Pipe gold project. Would you know what attracted Hochschild to specifically that project and not for anything else in your portfolio?
The SW Pipe project immediately stands out to anyone looking for elephant type deposits. It is next to 20-25 million ounces of gold held in the Nevada Gold Mines Pipeline-Cortez camp, has a historical resource at surface with the source never found. After reviewing the database, the location, the opportunity to drill a few potential deep holes next to millions of ounces of gold at our neighbor. It seems like a logical easy decision.
Their team is highly respected and spend their money wisely. It will be one interesting program to watch. I believe their team could perhaps have interest in a few more of our projects, but SW Pipe is a great place to start. Our portfolio consists of many drill ready projects that we continue to learn more about the opportunity each time we review them. Hochschild can’t drill all the projects, so we continue to discuss other opportunities, but SW Pipe is one to watch when that drill rig starts to turn later this year.
Are you the operator of the exploration programs, and will you earn the traditional 10% operator fee?
Yes we are the operator and will receive the 5-10% fee for all related costs on the project. There is a minimum of US$400,000 that has to be spent this year while there also is a cash payment within 60 days and annual cash payments to NV Gold each year. The annual exploration budget climbs each year to reach US$7.5M over 5 years excluding the $750,000 to NV Gold over the same period to get 51%. I suspect we may surpass that first year commitment fairly easily if we push a hole or two deep this upcoming fall/winter.
Nevada in General
Nevada still seems to be one of the hot spots of gold (and silver) exploration and a lot of exploration stage companies are flocking back to The Silver State. You’ll be focusing on Slumber and Sandy for the time being but you obviously have an asset portfolio with about a dozen other projects. Are you seeing an increased level of inbound interest for additional joint ventures?
Yes we are definitely seeing interest and have signed multiple CAs to review our projects. The groups we are looking for have to bring the right synergies for our team and shareholders. We own all our projects 100%, some with NSR’s and some with none. We are in no rush, as internally we would like to test them all before doing smaller deals.
OceanaGold has been poking around in Nevada with some joint venture agreements on very early-stage projects, and now we see Hochschild do the same with you. Do you anticipate this model whereby bigger companies could spend $1-2M and then walk away if an asset doesn’t meet their investment criteria gain momentum? We would assume deals like that work for both parties (the MajorCo and the smaller Exploreco)
The majors, and in general the market, are hungry or bringing an increased desire to make discoveries sooner than later. A number of groups have their inventories or gold on the balance sheets in the inferred, indicated and measures depleting. The gold sector is heating up and yes some projects held by us and by our peers are definitely worth this risk capital to deploy for the potential of a new discovery. It has been a few years since Nevada has yielded multiple gold discoveries and the sense of urgency exists to work with us little juniors in “one-offs”. NV Gold would be a perfect exploration engine for one of these majors with our portfolio, extensive databases, and team….but they have recently moved away from the strategic 19.99% stakes in companies like they used to historically. Maybe that will change…you never know…
Upon announcing your C$3M financing, you mentioned 2021 will be the most active year ever for NV Gold. Could you elaborate on that statement?
During 2021, we are planning to test various projects in multiple drill programs. We are looking to drill Slumber (near surface and deep), Sandy (potentially later this year likely after we finalize assay results and modeling). Oasis and Root Spring are being reviewed for a few test holes, and finally, we have a few acquisitions we are looking to drill and maybe add a couple of others that also look very exciting.
Raising C$3M appears to be a good move as this will further strengthen your treasury and fund all your planned activities. Crescat Capital invested about half a million Canadian and was the lead order, but were there any other institutional investors participating in your financing, or was it more retail-dominated financing?
Once again, this private placement was led by Crescat as they believe in our exploration model and the risk/reward offered by our projects and team. If investors are in our company for one drill program, then maybe we are not the most suitable company to have a position in. We are a long term hold as we hope to offer the risk/reward aggressive opportunity each year. This year in the recent financing we focused on attracting those specific type of investors. With close to C$5.0M in the treasury, C$1.2M of warrants in the money and being exercised each day, and no debt we are in a good position to execute on the aggressive year we have planned. We were able to do the financing with no finders fees, which helped us net $3M in the bank.
Do you see a different mixture of interested parties in funding gold exploration companies? Is the risk appetite returning in the markets, or are you still very much dependent on the retail side of the market to keep you funded? Do you see any geographical shifts with more interest coming from other regions than North America?
The market is starting to heat up again and during this recent financing we actually had to turn away close to C$4M above the C$3M we targeted. I see the interest in companies like NV Gold returning now the crypto stuff seems to be fading, and pot and other types losing pace. My view is everyone has to have a small (or large) piece of a company like ours, as I mentioned the risk / reward is significant. We have, after all these years only 80M shares issued and the largest shareholder group is still the management, followed closely by Crescat now. With this financing, we are cashed up and ready to deliver a steady news flow and maybe even a discovery (fingers crossed). We attempt to put most of the funds into the ground. If we hit on any of these projects the reward will be well worth the patience. I have noticed a lot of new money coming from the USA and Europe and Canada continues to have standard groups that want to be part of the story as we explore the great State of Nevada. We have had a few funds maintaining their position or getting a position, but the retail market still loves exploration plays like ourselves.
You recently announced three additions to your asset portfolio, so you are clearly still building NV Gold out, and are maintaining the core focus on Nevada. How were you able to pick up these properties, and why are you the first public company to actually enter into agreements to acquire them? Are the project owners just more at ease with how NVX is approaching exploration?
Thomas Klein, our VP Exploration, has built extensive relationships with some of the best explorers in Nevada. Friendships and a common goal sometimes are key to being able to make the right deal that is accretive to NV Gold. We are building a team with the Geologists (now private prospectors), who bring a wealth of knowledge and discoveries in Nevada. We are stronger with them and the synergies so far have been excellent. If NV Gold makes a discovery, they win, and our shareholders win as well. We don’t have ego’s and don’t play games. We believe in their projects based on our knowledge of Nevada. The prospectors believe in us and see the opportunity to partner with NV Gold.
All your recently announced acquisitions are drill-ready. Is this the main prerequisites when you’re looking at projects?
We want to have the opportunity to acquire projects that are at a stage that will require the least amount of capital for a discovery. These are at this stage.
From Carlin to Pediment to Epithermal high grade style, each project could yield a win for our shareholders from a future drill program. Our goal is to create the opportunity for a discovery. Our new VP Exploration Thomas Klein, who has worked in Nevada for many years has wanted to drill test each of these projects for years based on his extensive knowledge of each property. I 100% believe in my team and look forward to the next steps at each project.
Which project will be prioritized, and how do you define the order?
We will be reviewing all projects and budgets in our mid-year budgetary and exploration planning session in July. Based on our technical committee’s decision we will look to define the order and priority at that time. Our 2021/22 exploration plan will be explained soon to our shareholders.
Any other projects/ideas you’d like to see highlighted?
The Sandy Project, after we get the internal modeling and assays out, should be an interesting project for later this year and based on an IP survey this fall and additional mapping, I believe we will look to put together a Phase 2 exploration program with a potential deep core hole program. I look forward to reviewing this project more after we discuss the results soon and next steps in an upcoming press release.
On our other projects, with the quality of the projects, we could probably create or fill a portfolio for 2-3 shells looking to explore in Nevada. To all those new groups looking to come explore in Nevada, give me a call at 1-888-363-9883, as it connects directly to my cell.
NV Gold will have an action-packed year as several projects will be drilled. The Company still acts as a project generator and was able to attract Hochschild as its joint venture partner on the SW Pipe project, and the cash contribution from Hochschild could really jumpstart the exploration activities there.
Additionally, NV Gold has been expanding its team as it officially appointed Thomas Klein as its new VP Exploration while Howard Golden is joining the board of directors and his multi-decade experience in the mining sector will for sure be useful to the company.
Meanwhile, NVX continues to expand its asset portfolio. Three new projects were added over the course of just a few weeks, and we wouldn’t be surprised if NV Gold would scoop up more projects to its portfolio in the next few months. Slumber and Sandy remain attractive projects that are still fully controlled by NV Gold, but it’s pretty clear the company will be active on multiple fronts this year which should result in a strong news flow going forward.
Disclosure: The author has a long position in NV Gold. NV Gold is a sponsor of the website. Please read the disclaimer.