“For the activity, our market value, company cash holding, the outfits we have and the company we’re about to begin, the potential for serious growth in our company in the next 3-6 months for investors is substantial.”Maximilian Sali, CEO, Director & Founder, New Placer Dome
MARKET SUMMARY: Gold Exploration
Investing in junior gold exploration stocks can be high risk, but some of those risks can be mitigated by choosing an experienced management team with good exploration assets, selecting the right geographic location, and investing in prime gold producing regions.
One such company which has all these attributes is New Placer Dome which IPO’d in April 2019 and has quickly acquired a number of interesting gold projects. Formerly called Barrian Mining, management changed the company’s name to New Placer Dome in May 2020.
New Placer Dome (TSX-V:NGLD | FSE:BM5) BUSINESS SUMMARY:
We believe New Placer Dome is currently undervalued for several compelling reasons:
1. A growing portfolio of productive assets located in Nevada
(NB – full details of these assets can be found further down this page)
- Two assets in the Great Basin (which spans nearly all of Nevada), both of which have had significant recent results
- Kingsley Mountain
- A third asset located at Troy Canyon, Nevada
2. A fully-financed drill program starting in mid-July 2020
New Placer Dome’s management team recently raised approximately C$12.4m and has just started exploration and drilling programs on each of the projects.
The company has started drilling exploration work using 3 rigs (1 on Bolo and 2 on Kingsley Mountain which arrived on site on July 15th 2020)
No other Junior Exploration Company is currently executing the size of exploration program of New Placer Dome in Nevada including mid-tier mining companies
- We expect further gold discoveries from these drilling programs to confirm the large potential of the two projects at Kingsley Mountain and Bolo.
Full exploration results are expected in late 2020 and could be a catalyst for a re-rating of the company.
|9.90%||Liberty Gold Corp|
The Investment Sources Includes Financing From Liberty Gold Corp (A Major Industry Backer)
Liberty Gold Corp. (TSX: LGD) is New Placer Dome’s largest shareholder owning approximately 9.9%, who have not only taken a stake but have also taken a seat on the board, are sharing resources, and are advising on future drill programs.
READ OUR SPECIAL REPORT – Why Invest In New Placer Dome: Deep Dive Into The Three Main Nevada Drilling Sites.
3. A highly-experienced management team and advisory board
COMPANY GOAL: to create value for shareholders through the drill bit.
New Placer Dome’s founders are a group of entrepreneurs with deep roots in the exploration and brokerage industry:
- New Placer Dome is run by a strong management and technical team consisting of capital market and mining professionals with solid shareholder backing, as well as successful public market and mining entrepreneurs
- The team aims to maximize value for shareholders through new mineral discoveries, committed long-term partnerships, and the advancement of exploration projects in geopolitically favourable jurisdictions
- The latest additions to the management team, as senior technical advisors, are:
(an experienced exploration-mining geologist)
Mr Hitchborn has worked for several major gold companies including being a senior geologist for Placer Dome, and the chief geologist at the Bald Mountain gold mine in Nevada.
Mr. Hitchborn is an experienced exploration-mining geologist with nearly 40 years of practice in mineral exploration and mine operations throughout the world.
“We are excited to have Alan join the Company’s advisory board as our senior technical advisor. He has worked for several major companies including being a senior geologist for Placer Dome and the chief geologist at the Bald Mountain mine when it was previously owned by Placer Dome. He is a seasoned veteran in the space and has been on site at the Kinsley Mountain gold project and the Bolo project in the past.”Maximilian Sali , CEO, Director & Founder, New Placer Dome
(an exploration geologist)
Mr Jackson has spent most of his career leading teams in the exploration for Carlin-type deposits in Nevada.
“Mr. Jackson is a Carlin expert in Nevada, having contributed to the discovery of several multi-million ounce gold deposits including two Newmont deposits and most recently Gold Standard Ventures, where he was VP of Exploration from 2014 to 2019. Mr. Jackson came highly recommended by the Liberty Gold technical team and we are pleased to have him join our technical advisory board.”Maximilian Sali , CEO, Director & Founder, New Placer Dome
4. Highly-favorable market conditions and drilling locations
Nevada: A Premier, Prolific And World Class Mining District
- The state of Nevada is widely considered as one of the world’s premier mining districts, due to its mineral assets, location, and favourable government infrastructure focused on developing mining infrastructure, due to its transparent, predictable and established permitting rules/guidelines
- Nevada accounts for 83% of USA gold production, making it the 5th largest producer in the world
- This accounts for The Fraser Institute ranks Nevada as the best location on its investment attractiveness index
The timing is also right for New Placer Dome’s drilling projects, because of the a sharp rise in the world gold price due to the Covid-19 global pandemic.
“The price of gold passed the $1,800 mark this morning – a milestone notorious for being a psychological barrier – and has peaked at $1,805.27 per ounce so far in today’s trading. This is the highest gold has been since the middle of September 2011, and comes just one week since we reported gold first hitting a nine-year high.”
Based on these factors, we believe New Placer Dome is undervalued relative to its Nevada mining peers and its share price will benefit significantly from its strong growth story (details below) and new exploration projects at Kingsley Mountain and Bolo starting from mid-July 2020 and over the next 3-6 months and beyond.
READ OUR SPECIAL REPORT – Why Invest In New Placer Dome: Deep Dive Into The Three Main Nevada Drilling Sites.
New Placer Dome has 3 projects located in Nevada:
- Kinsley Mountain
- Troy Canyon
The Two Flagship Projects
The focus of management in 2020 is on its two flagship projects, Kinsley Mountain and Bolo. Management aims to:
- Expand and advance the Kinsley Mountain mineral resource by focusing on high-grade drill targets
- Advance the Bolo project through step-out drilling to develop a potential mineral resource estimate.
SITE #1) Kinsley Mountain, Nevada
In December 2019, the company acquired an option to acquire Liberty Gold’s 79% interest in the past-producing, Carlin-style, Kinsley Mountain gold project, which is located 90km south of the producing Long Canyon mine owned by Newmont Corp. Kinsley Mountain already has a resource estimate of 535koz of gold (updated National Instrument-43-101 technical report)
Kinsley Mountain Production/Location Details
A high-grade concentrate plant at Kinsley has delivered significant economies of scale and reduced the production costs of the concentrate.
- A Carlin-type asset with an updated NI43-101 resource of 535k ounces I+I
- A previous total production of 138,000 ounces between 1995-1999
- The total land package is 4,213 acres with only 20% explored through drilling
- Kinsley Mountain is located 90km away from the Long Canyon project
Kinsley Mountain project: exploration drilling targets
The drill program in summer 2020 will focus on high grade Secret Canyon Shale-hosted gold mineralization, looking to extend the deposit along strike and at depth.
Successful drill results confirming the presence of gold mineralisation at depth as well continuity would be significant, and could result in a significant increase of the resource estimate at Kinsley Mountain.
This would provide further confirmation that the deposit has the potential to be another large Carlin-type mine.
Boart Longyear to provide crews and drill rigs
New Placer Dome has secured Boart Longyear, based in Elko, Nevada, to provide a two crews and drill rigs for the 2020 drill program at the Kinsley Mountain project.
Boart Longyear is experienced with the project, having successfully drilled Kinsley Mountain in the past with Liberty Gold Corp. Drilling commenced in mid-July and the company expects to complete a total of 20,600m (~67,600 feet) of drilling over the summer months.
Kingsley Mountain Exploration Timeline:
Phase 1 (2020):
- A drill program of 15,000m reverse circulation drilling (RC), 5,600m of core drilling, at a maximum budget cost of US$4.15 million
- This will test and expands Racetrack, Transverse, Big Bend, Western Flank, and KN targets
- Liberty Gold will assist New Placer Dome in selecting drill targets
Phase 2 (2021):
- A drill program of 10,000m RC, 5000m core drilling, at a maximum budget cost of US$3.1 million
- Follows up on phase 1 results at previous zones, and additional holes in KN
- Acquisition of 4th and One ground to examine the control district potential for Carlin-style gold.
- Detailed surface geochemistry and induced polarisation (IP) survey of 4th and One ground.
- Drilling pioneer holes in 4th and One high priority targets (3,000m RC planned)
The Kinsley Mountain is an interesting gold exploration project, firstly because it has been a heap-leach gold operation in the past, producing 138,000oz of gold in the mid to late 1990s, and secondly because of its potential. It already has a gold resource of 535koz, while 80% of this project remains unexplored.
New Placer Dome believes there is significant potential to expand the footprint of known mineralization and contained resources.
For New Placer Dome the timing is perfect – any new discovery on this property will be a game-changer for the company and could see the company’s share price rise sharply.
SITE #2) Bolo, Nevada
Bolo Production/Location Details:
- High-grade Carlin-type deposit located 90km North-East of Tonopah (near Kinross’s Round Mountain mine which has produced over 10M ounces of gold)
- A successful 1,832 meters drill program resulted in new high-grade oxide discovery at depth, which delivered some of the most significant gold intercepts of all Nevada in 2019
- Widespread gold mineralization at surface; 13.7m of 4.97 g/t gold from surface from the 2019 program
- The 2019 exploration program at Bolo drilled the highest 2% grade of all oxide grades drill holes in Nevada by any Junior, Mid-Level or Senior Producer.
- The total land package is 3,332 acres (with main access point is the Hot Creek Ranch, Nevada) with cabins for accommodation, located just off the highway and very easily accessible. There’s also a hot springs on the property, so all the water onsite comes from the land owner that we have an agreement with
The Bolo project is at an earlier stage than Kingsley Mountain and, as yet, does not have a reported resource. Nevertheless, it looks highly prospective based on early exploration results and has the potential to be a large Carlin-type deposit.
Carlin deposits only form when a few factors line up: the right kind of carbonate rocks have to be cut by the right kinds of fault structures and an active, gold-bearing hydrothermal system has to have welled up through those structures.
When these factors line up, a Carlin gold deposit forms. These deposits usually exhibit a number of similar characteristics:
- Northerly-trending structures, usually a northerly trend with high-angle northwest and northeast faults cross cutting
- Breccia bodies along the fault structure
- Arsenic, antimony, barium, and silver associated with gold
- Hydrothermal alteration of carbonate rocks: silicification, iron oxides, sanding texture (from leaching), and crystalline barite
- Low concentrations of base metals (copper, lead, and zinc)
At Bolo, these characteristics are all present.
In June 2018, New Placer Dome acquired a 50.1% option over the Bolo project from Allegiant Gold for a total exploration spend of US$4.0m and US$1.0m in shares.
The exploration expenditure is planned to be spent from 2019 to 2022. New Placer Dome can then elect to increase its interest in Bolo to 75% with an additional US$4.0m exploration expenditure in 2023 and 2024.
Key Geological Features
Key features to the geology of gold mineralisation are fault structures.
The Bolo property is cut by two parallel north-trending fault structures.
- The main Mine Fault has been tracked for 2,750m with sample results as high as 8.6 g/t gold.
- The parallel East Fault is almost 2,200m and has generated samples as high as 4.7 g/t gold, although has had much less exploration work.
Summer 2020 Exploration Program Timeline
With an investment of CA$750,000 – US$1 million, the company is looking to achieve the following goals:
- Deeper Drilling: with a target to hit 300 metres, 400 metres and beyond and continue hitting oxide decks.
- A further 3,500 meter RC drill program to connect the two zones of the out deck:
- South Mine Fault
- Uncle Sam
With the South Mine Fault drilling targeting deeper gold zones below previous new discoveries, Bolo is hoping that additional discoveries will allow the location to grow substantially in both output and revenue.
SITE #3) Troy Canyon (A strategic acquisition close to Bolo)
- A 1,219 acre land package with small gold production around 1955.
- The site includes:
- High-grade gold mineralization within mesothermal quartz veins,
- Vein breccias
- Narrower sheeted vein and stockwork zones
In September 2019, New Placer Dome (TSX-V:NGLD | FSE:BM5) signed an option agreement to acquire 100% interest in the Troy Canyon gold-silver project located in Nye County, Nevada from Brocade Metals Corp. for US$50k in cash and 1.25m shares of New Placer Dome. The Troy Canyon project is strategically close to the Bolo project.
This project hosts an historic mine (1950s) and has high-grade gold mineralization within mesothermal quartz veins, vein breccias, and narrower sheeted vein and stockwork zones.
Recent stope samples have returned values of 47.8 g/t gold, 48.4 g/t Au, and 576 g/t gold including 229 g/t silver.
A quartz vein system is exposed on surface over 300m and soil geochemistry indicates several anomalous gold zones outside of the mineralized area. Drill testing is required to expand the depth and strike length of the mineralization.
Whilst the other two locations at Kinsley Mountain and Bolo are the immediate priority, New Placer Dome intends to leverage historic work and data to potentially increase the value of the Troy Canyon project before commencing further exploration.
Use of Proceeds for Projects
Sources and Uses of Funding for 2020 Exploration Projects
|KinsleyExploration (incl. BLM + Advanced Royalty)||Up to USD $4.15M|
|Bolo Exploration||USD $750K|
|Troy Canyon Consideration||USD $25K|
Based on the factors outlined in this document, the prospects for future sector growth appear highly positive, with New Placer Dome –thanks to its prime Nevada exploration locations and experienced leadership and production team – set to establish itself as a leading Nevada-based junior exploration company in 2020 and beyond.
READ OUR SPECIAL REPORT – Why Invest In New Placer Dome: Deep Dive Into The Three Main Nevada Drilling Sites.
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