Nevada Exploration Inc. (TSXV:NGE) has designed its exploration strategy specifically to target 5-10 million-ounce size deposits
Dr. Allen Alper | May 4, 2018 | SmallCapPower: Nevada Exploration Inc. (TSXV:NGE) (OTCQB:NVDEF) should have the best chances of success exploring for monster-size gold deposits. They have the Midas touch, being involved in the discovery of +37 Moz gold in Nevada to date and now they are narrowing in on large Carlin-type deposits on the Battle-Cortez Mountain trend. A unique exploration strategy has been developed to specifically target 5-10 million-ounce size deposits in the basins of Nevada by collecting approximately 6,000 groundwater samples. Nevada Exploration has completed the world’s largest groundwater sampling program and constructed a proprietary hydro-probe to overcome the challenge that has held back explorers, investigating under cover of gravel. Now there is nothing holding NGE back from searching in new areas never explored.
Dr. Allen Alper, Editor-in-Chief of Metals News, spoke recently with James Buskard, President of Nevada Exploration, who said that as a result of their regional-scale generative program, they’ve ended up with a pipeline of targets for drilling, with the two targets, South Grass Valley and Kelly Creek, ready for intensive, deeper core drilling programs this summer. Dr. Allen Alper: This is Dr. Allen Alper, Editor-in-Chief of Metals News, interviewing James Buskard, President of Nevada Exploration. Could you give our readers/investors an overview of your company, your focus and current activities?
James Buskard: Yes, absolutely. We’re an early-stage project generator, based in Nevada. We’re 100% focused on looking in the covered basins of Nevada for large Carlin-type gold deposits. Nevada is well known for these large systems, focused primarily along the Carlin and Cortez trends. What many people don’t know is that more than half of the state’s bedrock is covered in valley basins.
Because conventional tools are so challenged, in terms of exploring in covered settings, exploring under cover, traditionally, has been very risky and very expensive. So, fully half of Nevada sits there predominately under-explored. What we’re focused on, as a company, is opening up this half of Nevada that hasn’t really been looked at yet.
Dr. Allen Alper: That sounds excellent. Could you explain to our readers/investors the approach and the techniques you use to explore, when rocks and outcrops are covered?
James Buskard: It comes back to being very clear about what the criteria are, the critical components of a large Carlin-style system. Then, how do we confirm they’re present in covered settings? It’s pretty simple. Carlin systems require a large structural conduit to allow the hydrothermal fluids to come up from depth. They need suitable hosts. We’re always looking for the right type of rocks and big structures. Then, we’re looking for alteration signatures that suggest that these systems have been turned on, that hot water has been moving through them.
By far the most discriminating filter is geochemistry. You can have the best rocks. You can have big structures, and they can be hydrothermally altered. But, unless the hydrothermal fluids had a mineral component, you’re not going to end up with a mineral deposit.
Metal has always been the best vector to metal, but what do you do when you can’t sample the bedrock? We looked at what had been successful in opening up other covered search bases around the world. Things like the indicator mineral till sampling programs of the Northwest Territories that opened up the Canadian North for diamonds. Ultimately, large regional geochemistry programs have been the architecture, behind which opening up new search bases has been done historically.
We put our thinking caps on, and thought, “Well, what can we sample in these basins that provides us representative geochemical information about the bedrock?” Over the last couple decades, the analytical tools in the laboratories are now so good and the detection limits are so low, that we’ve been able, for gold, to take a page out of what’s being done in other sectors, such as base metal and uranium. That’s looking at groundwater chemistry. As groundwater flows in these covered valleys and interacts with the covered bedrock, the groundwater picks up a characteristic geochemical signature of whatever is in the bedrock. Where you have a covered gold deposit interacting with the groundwater, you end up with a geochemical footprint in the groundwater. Now that the analytical tools are good enough, we can measure that.
Putting all these pieces together, we’ve now completed the world’s largest groundwater sampling program for gold, focused on the north central part of Nevada, famous for Carlin-style systems. Using hydro-geochemistry, groundwater chemistry, with conventional exploration and geophysics, we’ve built an exploration program, specifically for Nevada’s covered basins.
Dr. Allen Alper: That sounds excellent. What are your plans for 2018?
James Buskard: As a result of our regional scale generative program, we’ve ended up with a portfolio, a pipeline of targets, if you will. Three of which, we have currently staked. Cumulatively, we have more than 100 square kilometers of ground tied up. We’re advancing each of the three projects through a very conventional and systematic exploration program, using geophysics and wide-spaced stratigraphic drilling to understand the big picture. Two of these projects, South Grass Valley and Kelly Creek, are ready for intensive, deeper core drilling programs this summer. Our plans for the summer are to drill both projects.
Dr. Allen Alper: Will you drill them yourself, or will you get a partner to work with you?
James Buskard: We are presently looking for a funding partner. Our preference is to manage these projects ourselves. The exact deal structure that we’re looking at (equity, JV, royalty, or mix) is yet to be determined. We’re in discussions with several groups. Our preference at the moment is to manage the projects ourselves.
Dr. Allen Alper: That sounds very good. Could you update our readers/investors on your background, the team, and the board?
James Buskard: Yes. Nevada Exploration’s hydro-geochemistry program was originally the brainchild of my colleague and our CEO, Wade Hodges. Wade Hodges ran the Western Great Basin for Santa Fe, before Santa Fe was purchased by Newmont. And, was involved at a pivotal time in Nevada, where he and his team discovered many of the large deposits that Newmont has mined today, including Lone Tree and Twin Creeks. Recognizing that the future of Nevada was figuring out how to go under cover, after Newmont bought Santa Fe, Wade decided to go off on his own to pursue hydro-geochemistry as a tool to open up Nevada.
I found out about what Wade was doing in 2004. My background is hydro-geochemistry, and I have an environmental science background. I joined Wade in 2004, along with another colleague of ours, Ken Tullar, and began collecting samples for, what is today, the world’s largest groundwater chemistry program.
On our board, we’re very fortunate to have a Ph.D. geochemist by the name of John Larson, a former long-time BHP geologist. He continues to provide some independent technical oversight at the board level.
Our Chairman, Dennis Higgs, is well known in capital markets. Formerly the chairman of Uranerz, a uranium producer prior to its friendly merger with Energy Fuels.
We’re a long time Nevada team on the ground and on the board, with both capital markets and technical support for our team.
Dr. Allen Alper: Sounds like you have a very experienced and very competent team. You have an excellent background for the work you’re doing and you’re doing an excellent job.
Could you tell us a little bit about your capital structure and your share structure?
James Buskard: We have approximately 55 million shares outstanding, about 1/3 of that is held by management insiders and insiders’ families. Fairly well held, in terms of holding off any potential takeovers with any sniff of success here. With a market cap floating just under $20 million Canadian, right now.
Dr. Allen Alper: What are the primary reasons our high-net-worth readers/investors should consider investing in Nevada Exploration?
James Buskard: I think what differentiates us most from our peers is the fact that we’re so focused on looking for new large deposits. By being the first into a new search space (the covered half of Nevada), we have the benefit of being able to go after the low-hanging fruit. Large deposits are characterized by large footprints, which are inherently easier to find. We’re really biasing our program towards finding another Cortez or another Goldstrike. We’re not here trying to take a million-ounce deposit and improve it to two million ounces. We’re looking here to find a new 5-10-million-ounce size deposit.
I think the upside here is really what differentiates us most from our peers. What ties it all together, is that any success on one project really speaks to the validity of the entire pipeline. No other portfolio in Nevada is linked like that. Success on one project in a portfolio of our peers doesn’t speak to the value of any of their other prospects. Whereas, because all of ours are tied together and part of the same workflow, the leverage that investors are exposed to upon any success is really unusual.
Dr. Allen Alper: That sounds excellent. Is there anything else you would like to add, James?
James Buskard: We’ve all come through the last cycle, and we’re sitting here at what we hope is the beginning of the next cycle. Everyone likes to show the chart, more money being spent by more people than ever before in the last go-around, yet discovery rate is falling. While everyone likes to show that chart, not many people dive deeper and ask questions, “Well, why is that? How do we avoid repeating that?” Continuing to spend money looking in already mature districts and search spaces, provides diminishing returns. If we want to, as an industry, get back to creating value, as opposed to destroying value, we need to find ways to open up new search spaces.
That’s not a story that’s unique to Nevada. It’s not unique to gold. But, I encourage investors to seek out opportunities for opening up new search spaces. Because, I really think that’s where the big gains have traditionally been made, and where the big gains are going to be made again.
Dr. Allen Alper: Well, that sounds like an excellent approach, and it sounds like your company is well-equipped to do that.
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