The discovery of a gold vein can dramatically change the outlook for a gold project. So when an un-drilled gold vein is discovered outcropping at surface at a gold project with a defined resource, it certainly warrants further investigation.
Some boots-on-the-ground work by NevGold Corp.’s (NAU:TSX.V; NAUFF:OTC; 5E50:FSE) geological team at the recently acquired Nutmeg Mountain Project in Idaho found an undrilled 6-meter-wide low-sulfidation epithermal vein outcropping at surface — more than 650 meters from the boundary of the current resource, defined in 2020.
NevGold management believes the vein, which is exposed some 100 meters along strike, could lead to a lateral expansion of the existing resource.
The company went even further in a release, stating that the vein could be “the high-level portion of a high-grade feeder zone.”
Geochemical work suggests the vein is near the top of the epithermal system, above the would-be gold-silver zone.
Thibaut Lepouttre follows NevGold in his Caesars Report newsletter. He sees the Nutmeg Mountain news as positive for shareholders.
“This is good news and confirms the exploration potential at Nutmeg Mountain. Although about 90% of the resource is already in the indicated resource category, which could make you think the deposit had already been ‘drilled off,’ the focus of the previous owners was on upgrading the resource to M&I. Finding a new zone confirms the potential to add ounces beyond the 1.07 million ounces across all categories,” Lepouttre told Streetwise Reports.
He added, “The key to unlocking value at Nutmeg will be fine-tuning the metallurgical approach to boost the recovery rate. This work is expected to start in the fourth quarter of this year.”
Technical Analyst Clive Maund echoed Caesars Report and took it one step further.
“With the metals starting to recover, there are three stocks that are rated immediate Buys, with two of them having come out with important news this morning. The first is Nevgold Corp., which we went for early in August but is now at an even better price. The chart is most promising, and it is believed to be at an excellent entry point here,” Maund wrote in a September 8, 2022 post.
NevGold geologists relogged the historical drill core provided by the previous owners after the Nutmeg option agreement closed in early July. They found visible gold in the drill core, starting at about 45 meters down-hole.
“This is good news and confirms the exploration potential at Nutmeg Mountain.”
— Thibaut Lepouttre, Editor and Publisher of Caesars Report
They also identified a structurally controlled, high-grade core in the 2020 resource. Most of the historical drilling at the project was vertical and did not test the full extension of the higher-grade portions of the orebody at depth or along strike. Further drilling in these areas could provide an opportunity to increase the size and grade of the resource.
With surface mapping now complete, Nutmeg is drill-ready, and the company has outlined multiple resource expansion and exploration drill targets. A 10,000-meter drill campaign should start sometime in October, leading to a resource update in Q1/23.
“There are three stocks that are rated immediate Buys, with two of them having coming out with important news this morning. The first is Nevgold Corp., which we went for early in August but is now at an even better price.”
— Technical Analyst Clive Maund of CliveMaund.com
The company plans to drill another 7,000 meters at its flagship Limousine Butte project in Nevada. The updated resource at Limousine should also be published in Q1/23.
Drill results from earlier this year on Limousine Butte will likely be published later this month.
NevGold also plans to explore its Ptarmigan silver project in British Columbia after issuing 1.72 million flow-through shares at CA$0.65 each to raise CA$1.12 million (Money raised via flow-through shares must be used exclusively on exploration work in Canada).
“I’m looking forward to seeing the company’s plans on the Ptarmigan project in British Columbia,” Lepouttre told Streetwise Reports.
Details of the Deal
NevGold optioned Nutmeg Mountain from GoldMining Inc. for about CA$9 million in shares and cash and came away with a National Instrument 43-101-compliant Measured and Indicated resource measuring 43.5 million tonnes grading 0.65 gram per tonne gold (0.65 g/t Au) for a total of 910,000 oz Au (910 Koz Au). The Inferred resource is 160 Koz Au gold in 9.1 million tonnes grading 0.56 g/t Au.
That puts the acquisition cost somewhere around CA$11 an ounce.
NevGold issued 4,444,444 common shares to GoldMining at a price of $0.675 apiece.
The deal also came with a lead order totaling CA$1.25 million for NevGold’s next financing — a considerable advantage for a junior company shopping for a raise. GoldMining’s lead-order commitment expires at the end of November, so a financing will happen before that.
To fulfill its option agreement, NevGold must make a series of payments: January 2023, CA$1.5 million; July 2023, CA$1.5 million; January 2024, CA$3 million. These amounts can be paid in cash or shares.
The junior must spend at least CA$2.25 million on exploration, CA$1.5 million of which must be spent before June 2023. A further CA$7.5 million is due if NevGold advances Nutmeg to a feasibility study.
According to Reuters, NevGold’s top shareholders include: GoldMining Inc., which owns 11.77% or 5.93 million shares; McEwen Mining Inc. with 9.86% or 4.96 million shares; Brandon Bonifacio owns 7.68% or 3.87 million shares; and Giulio Bonifacio owns 7.67% or 3.86 million shares.
The company has roughly 58 million shares outstanding, about half of which are free floating.
It trades in a 52-week range of CA$0.85 and CA$0.38 and closed at CA$0.42 on September 7, 2022
1) Brian Sylvester compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He and members of his household are paid by the following companies mentioned in this article: None. His company has a financial relationship with the following companies referred to in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: NevGold Corp. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of NevGold Corp., a company mentioned in this article.