A Quest for Five Million Ounces

Cherie Leeden: Very well, thank you. Thanks for having me.

CL: Thank you. I'm a geologist by background. I've got about 20 years of experience in geology. I'm from Australia originally. I went to school at the Curtin University WA School of Mines. And my first job was with LionOre… had exposure to some awesome mine finders, and LionOre did very well and was eventually taken over by Norilsk.

After LionOre, I worked for Rio Tinto. And it's at Rio Tinto where I actually met our chairman, Craig Parry. So Craig and I go back quite a while. As do Dave Johnson, our VP of Exploration, and I; we worked together at LionOre 20 years ago.

So I had some wonderful training… was involved with a couple of discoveries working for those different outfits. And then went on to do a bit of project generation and was working for a couple of private companies looking for world-class assets and essentially packaging them up. Got a little bit of CEO experience as well. I founded a company called Metals of Africa that went on to become Battery Minerals on the ASX.

And since then, I've been back to doing what I love — which is project generation; matching world-class assets with companies that are interested in a particular commodity.

And it was during the course of that project generation for my company, NZ Resources, that I came across the sweetest gold projects located in Nevada… I just thought, well, they were just too good to pass on to someone else.

So Craig and I got talking just over a year ago… and contemplating what we'd like to do with these assets… and the first one is now in the company. The first one of those assets is Sandman, which is 300,000 ounces, which we were able to purchase from Newmont recently. And there's a whole bunch of other assets that I've appraised and my team knows quite well that we certainly have our eyes on.

We're under CA with a suite of projects, and I guess that's where our ambitious goal of 5 million ounces comes from. That really presumes a couple of additional acquisitions this year — which is what we're striving and aiming for.

CL: Right. You know, it was a process. And I can only presume that it came down largely to our values and our commitment to safety and the environment. Most of our team is locally based, so we have relationships based locally in the USA. We don't fly in and fly out.

We know the legislators and the communities where these projects are located. And I think that was quite important to Newmont to know that the project wasn't going to get flipped and it was going to end up with a group that puts the environment and safety as core priorities.

And again, that probably stems from our ex-Rio Tinto kind of schooling. Our board and management have come from the big companies… and we're really looking for world-class assets without this bureaucracy of a big company now.

We're very agile and we’re really aligned with our shareholders that we really want to make this company a success based on either discovering more ounces or acquiring more ounces.

CL: Yes. We have already purchased 100% of the asset for cash from Newmont. So we're in the process of transferring all of the permits and the various licenses from Newmont's name to our name… and we anticipate that all will be wrapped up in the next couple of weeks.

CL: Absolutely. So the initial upside is actually just crunching the data contained in those drill holes that have been completed by Newmont since that 2007 43-101. So we've had a resource geologist going over this data for the last couple of months.

And we were able to grow the resource at Sandman by 60% to 21.8 million tonnes at 0.7 grams per tonne gold. That’s comprised of an:

• Indicated Resource of 18,550kt @ 0.73g/t gold for 433,000 ounces of gold
• Inferred Resource of 3,246kt @ 0.58g/t gold for 61,000 ounces of gold

Since acquiring the project from Newmont in December 2020, it is a fantastic outcome to have grown our resource base to 494,000 ounces of gold before we even commence our drill program!

And that resource is actually also called a pit constrained resource so we run economic numbers and gold prices to work out that that's got a really good chance of one day being extracted.

As soon as the permits have been transferred from Newmont's name to our name that's when we can actually hit the ground and start our ground survey work such as the drill program.

So I'm looking forward to testing some of these IP targets. And our VP of Exploration is a geophysicist, and he's planning some really interesting areas that have never seen a drill hole at our Sandman project.

We've got about 8,000 meters planned and we've decided to do that in two phases. We're going to do the first phase of 3,000 meters. And then we're going to have a break in order to get our assay results back. And then we're going to go back and do the other 5,000 meters once we've worked out what our best targets are.

We’ve defined those targets based on a combination of this resource work where there are a number of holes, for example, where they're open and 10 grams a tonne gold. So they're obvious targets where we'll go and drill those targets to see just how far those high-grade gold mineralization zones extend.

Then we've also got a couple of new targets that were defined by ground geophysics called IP. They're really interesting and exciting because those ones have never been drilled before, yet they really pose some interesting numbers at the surface and now correlate with these big geophysical anomalies.

CL: Yeah, absolutely. I think that's critical in the US. You’ve gotta be in mining-friendly states. We really like Nevada but we're also open to Utah and Arizona. If we can find undervalued projects in those jurisdictions that have ounces in the ground, then we'll certainly be amenable to them.

I would say there's probably only… there's less than a handful of states that we're actually open to in the US but we're very comfortable operating in those three and, in particular, in Nevada. So I think it's a good place to be based. The economy right now needs more mines to really generate income for the state. And I think the state, in general, has a pro-mining mentality — so it's a great place to be based.

And we've got a two-pronged approach to increasing our ounces. So the first is by our exploration success. And that's what the majority of my team are focused on… finding ounces in our existing assets. And that's Sandman. But we also have Coyote and Big Balds.

And most of my time is spent looking at these new opportunities and trying to essentially buy ounces cheaper than we can define them using a drill rig and exploring for them because exploration is not cheap. And, occasionally, if you can find a non-core asset where it doesn't fit the company for whatever reason, you can really negotiate favorable terms and it works out to be more profitable to acquire than to explore.

CL: That's correct, yes. The rest of what we raised went to purchase Sandman and then to pay for the associated bond with Sandman.

CL: That's correct. And the bulk of those are actually at C$0.75. And there was an attaching warrant to our last capital raise that was done at C$0.50. And all out, we have 67 million shares currently issued. And then there's the 22 million-odd warrants but with an average price of C$0.55 and the majority at C$0.75.

CL: Yeah. We've got a lot of news flow coming up. Again, as we speak, I've got two of my geologists currently at the Coyote Project in western Utah where we've got high-grade gold sticking out of the ground. And that's another project that's one to watch.

We'll probably drill Sandman first and then move the drill rig onto Coyote just to test the legs of this gold mineralization that we're seeing at-surface… which is pretty high-grade gold mineralization for something that's never really been systematically explored.