Currently Drilling Two Carlin-Style Projects in Nevada
Both Have Past High-Grade Results Upcoming Results Could Take Shares
Much Higher Than C$.50
New Placer Dome is currently trading below C$0.50… and is offering significant value considering the potential of current projects. The company has three high-grade projects in Nevada, with two being drilled right now.
This is a Nevada-focused company with quality projects. And the zip code goes a long way given Nevada is the fourth-largest gold-producing region in the world and is consistently ranked globally as top place to discover mineral deposits and build mines.
Over 80% of gold production in the U.S. comes from Nevada, and it ranks in the top three globally on the Fraser Institute’s “investment attractiveness index”.
It’s notorious for its “Carlin-style” or “Carlin-type” deposits — sediment-hosted, disseminated gold deposits that contain dissolved or “invisible” gold only found through drilling and assaying.
This is one of the most sought after types of deposits in the world because of their low cost of production.
And New Placer Dome is actively drilling two of them, with early success already.
Kinsley Mountain Project - The Golden Arrow in the Quiver of New Placer Dome Gold Corp.
New Placer Dome entered into an option agreement in December 2019 to acquire Liberty Gold’s 79.1% in the Kinsley Mountain Gold Project.
Kinsley is made up of 513 unpatented claims and five leased patented claims. It covers a total land area of 4,187 hectares.
And it already has an indicated resource of 418,000 ounces of gold at 2.63 grams per tonne and an inferred resource of 117,000 ounces at 1.51 grams per tonne.
|Classification||Zone||Tonnes||Grade (g/t Au)||Contained Gold (ozs)|
It is on-trend with Barrick-Newmont’s Long Canyon mine, which is the most profitable mine in that joint venture at a $571 all-in sustaining costs.
But Long Canyon is producing 2.09 grams per tonne while Kinsley’s deeper sulphide zone is over six grams per tonne.
Long Canyon was discovered by Moira Smith. When it was sold to Newmont in 2011 for $2.3 billion, there was a spinout called Pilot Gold.
Pilot got the Kinsley project in the spinout and Moira went on to drill some of the best holes in recent Nevada history. Hits like:
Pilot stock ran to a ~$250 million valuation on the back of those results.
Now, several years and a new gold cycle later, New Placer Dome has been able to get it while its owner focuses on another project.
And New Placer Dome is currently drilling targets identified by Moira herself.
Will history repeat?
If it does, New Placer Dome shares are in for one wild ride. They would have to go up 10X to match the valuation reached the last time the project was drilled.
We cover the full history of the project, including the high-grade intercepts, in our interview below with Max Sali, the founder and CEO of New Placer Dome Gold.
Bolo Project - A Master Deal With Allegiant
New Placer Dome also has an earn-in agreement to acquire a 75% interest in the drill permitted, proven and highly prospective Carlin-type Bolo asset.
Management was able to secure this project when gold was below US$1,200 and it involved ZERO cash… meaning New Placer Dome is able to earn in for just shares and exploration spend!
Plus this project would be worth much more at today’s gold prices near US$1,900 per ounce.
It sits on over 3,330 acres just 90km northeast of Tonopah Nevada, and underwent a highly successful drill program in 2019.
The 1,832 meters drilled there last year delivered some of the most significant gold intercepts of all Nevada, and made a new high-grade oxide discovery at depth.
Drilling is underway there now as well, and if it can reproduce previous results like 122m of 1.2 gram per tonne gold… ounces will really add up fast!
Bolo also has a silver kicker, with one hole last year delivering a 4.6 meter stretch of 148 gram per tonne silver inside a broader zone of 74.9 gram per tonne silver over 22.9 meters.
The Phase 2 program will see 3,500 meters of reverse circulation drilling with a goal of going beneath the South Mine Fault and testing its continuity with Uncle Sam, where the silver was found.
It’s a significant second shot on goal with another Carlin-style project that’s already shown success with the drill.
CEO Max Sali outlines the plan in the interview below.
Troy Project - The Recent Addition in the Project Kitty of New Placer Dome
Troy Canyon is strategically located 30 minutes from Bolo and has seen past high-grade production.
It is an early-stage project but it has got very high potential with stope samples returning values of 47.8 g/t gold, 48.4 g/t Au, and 576 g/t gold including 229 g/t silver.
Drill targets are being identified now for Troy.
But right now the spotlight is on Kinsley… with results due out in Fall 2020 that could be game-changing for the company and its share price.
Here with me to talk more about it is Max Sali, the CEO of New Placer Dome.
Resource Stock Digest: Joining us today is the CEO of New Placer Dome Gold (TSX-V: NGLD)(OTC: NPDCF), Mr. Max Sali. Max, how the heck are you?
Max Sali: I'm fantastic. How are you doing?
RSD: I'm doing well, excited about your drill program at Kinsley. You've outlined your exploration plan, the Phase One plan, which will consist initially of 10,000 meters ahead of a second 10,000 meter phase. Can you provide the details there, and then we can get into the context and the color of it?
MS: Yes, the first phase is 10,000 meters. Based off those drill holes, if we’re hitting in a certain area, we're going to keep drilling in that area. We'll drill additional holes and if we really find a screamer, we'll follow up with a diamond rig just to really make sure we're consistent with those results. Very exciting.
RSD: Fantastic. You’ve got reverse circulation and diamond rigs. That is exciting. And some of the targets are extensions of previously drilled targets.
That's an important point, because of the historical drilling intercepts.
If you come close to duplicating those types of numbers, Max, the reaction obviously is going to justify looking at Kinsley as a standalone project. We want to hear more about the plan, but first let’s dig into the history of Kinsley, because it’s both fascinating and valuable.
MS: In November 2019, I started chatting with a gentleman by the name of Cal Everett who runs Liberty Gold Corp. Liberty Gold now has a $500 million market cap. They are actually our largest shareholder. As part of the transaction that we just did with them for Kinsley, we issued them 9.9% of our outstanding float. They have a 12-month lock-up on that stock. They have the right to maintain their position in any future financings. And Mr. Cal Everett, CEO of Liberty, is now on our advisory board as a senior financial advisor.
So we acquired the Kinsley asset from Liberty Gold. If people don't remember Kinsley – and a lot of people like yourself do and myself – the market cap of Kinsley when Pilot Gold drilled some of those phenomenal intercepts in 2013, 2014 I think was about $250 million. I think a lot of people, once they realize how powerful those old gold results were and what we could do in this market, I think that's where we get a lot of excitement.
The Kinsley sulfide zones that we are targeting are deeper. However, the average grade on that sulfide is 6.11 grams per tonne. To put that in perspective, Long Canyon, which produces 90 kilometers away – and it's on trend, you can see them producing at Long Canyon when you're standing on the top of Kinsley – the average grade they're producing is 2.09. But because that grade is still very high, Long Canyon is the most profitable mine in the Barrick-Newmont JV at $571 all-in sustaining costs. We're on the same trend. We have similar characteristics to them, but our grade is much higher.
RSD: You also have the expertise of not just your team, but the Liberty Gold team who, for those that aren't familiar with Long Canyon, it was an asset that eventually was monetized for just over $2 billion and was discovered by Moira Smith back when it was Pilot Gold, correct?
MS: Yes. So Fronteer gold, which was Moira Smith and Mark O'Dea was sold to Newmont in 2011 for $2.3 billion. There was a spinout after that takeout was announced, and that was Pilot Gold. In Pilot Gold was Kinsley. So Moira then went from Long Canyon to Kinsley, did an unbelievable job drilling some of the highest grade holes that Nevada has seen in, frankly, years, such as 18.3 grams per tonne over 23 meters. That's an unbelievable intercept. The stock had a great run.
Unfortunately, the markets were changing, we went into a very long bear market, as you know. What happened then with that asset is it got put on the back burner. Pilot switched its focus to copper porphyries in Turkey. And then in 2016, Cal Everett came in to step in as CEO to kind of clean the company up. If you look at the market cap, when he stepped in until now, it's been tremendous. How we got Kinsley was Liberty has an amazing asset called Black Pine. This could be one of the biggest new discoveries in the Great Basin in years.
And he has a number of majors, I would say all majors are looking at him. But for it to move the needle for any of these big producers, you need a 200,000 ounce a year producer to add to their portfolio. Black Pine could be that, which means everything else in this portfolio that won't do 200 is getting zero value. So what Cal did with me is by moving it into New Placer, Liberty becoming our largest shareholder, now he's marked us to market. Which means that when we issued him the stock, it was a $0.20 financing.
It allows us as a company to be focused on this asset while he's focused on something else and really put the time in. We have the money to drill Kinsley again and again, and again, just like they were doing in 2013, 2014. Yes, I am blessed that Moira Smith has chosen these targets.
RSD: A run like Pilot Gold had when it drilled Kinsley would put New Placer Dome Gold shares some 10X higher. Talk to us more about the C$4 million drill program at Kinsley. You’ve now got three rigs turning there. Why?
MS: When the market's doing what it's doing, why not? We have the money. We have the money to go and do it, and the core rig became available. We decided to take it. Like you said, excited about Kinsley. When you look at the numbers that Kinsley pulled out in 2013, which was 42 meters of 11 grams, 22 meters of 18 grams. We even had 5 meters of 46 grams. Imagine that in this market.
Having three rigs allows us to be more aggressive. Like I said, we have the money to do so. So, why not? I don't know why anyone in this market would not be taking the full opportunity with an asset like Kinsley.
Someone told me a long time ago, the best way to ruin a good project is to drill a hole. For us, all we're doing is drilling. Like you said, the truth machine. We want to make sure that people understand that Kinsley has a lot of significant upside. We are an aggressive company. We're energetic. I'm very bullish on the price of gold. I wake up every morning, just eager to get to the office and get working. Every day, I talk to my technical team for updates because I'm as excited as you or any other investor. We have an opportunity and we are taking it.
The nice thing about the core rig is we can go into the resource and we can upgrade some of the inferred to indicated, so we can build the resource that way. We're also stepping out to show that the resource is bigger. We also have the deep RC rig testing all brand-new, pure exploration holes. If we can hit some similar numbers in a new exploration hole, as you said, that's a company maker and a game changer for us.
RSD: And what about at Bolo?
MS: Bolo's an asset that we drilled last summer, a very successful asset. We were hitting over 1 gram per tonne oxide from surface to depth. We had a new discovery of 12.2 meters of 3.32 grams oxide at about 200 meters. What we did this year with the program, we wanted to go deeper, see if we could hit new discoveries at 300, 400 meters.
We wanted to see if we could connect the two zones, which would connect the gold and silver zones. Five holes have been completed, about 1,400 meters. How it works in Nevada, at least for our guys, is 20 days on and 10 days off. We went 20 days on with not one rig issue, doing unbelievable work, very efficient.
We're very excited about these holes coming out of Bolo, but we are also very excited to say that we have 13 holes at Kinsley that will be sent to the lab sometime next week, for again, a turnaround of about 21 days. We're hoping to get some of those Kinsley numbers out to the market mid to late October.
RSD: Max, thank you so much for the update. Appreciate your time.
MS: Thank you.
Location, Timing, History
New Placer Dome Gold has two assets in the Great Basin. Two Carlin-style assets. And we know there’s gold at both.
Multiple drill rigs are turning now, including two RC rigs and one diamond rig at the flagship Kinsley Mountain.
The work requirement on the earn-in to Kinsley this year is half a million dollars. New Placer Dome is spending $4 million on drilling.
That’s how confident they are in the project.
And given the address in Nevada, and the past drill results at Kinsley, we share in that confidence.
Shares of New Placer Dome Gold (TSX-V: NGLD)(OTC: NPDCF) trade below C$0.50 and the company has a market cap around C$25 million.
The last time Kinsley was drilled… it gave its owner a C$250 million market cap.
That’s a tenbagger from current levels, which makes the company worth a look today!Click here to learn more about New Placer Dome Gold now.
— Resource Stock Digest Research