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Discovery Watch is a weekly 15-30 minute audio show produced by HoweStreet.com where Jim Goddard interviews John Kaiser about resource juniors with projects that have caught John's attention. The projects will not be limited to companies he has covered through the Spec Value Rating System. Jim and John will periodically circle back to review the projects and if necessary close them out as no longer worth watching. Check out the catalog of KRO Free Stuff. KRO offers a USD $450 Annual Individual Membership. This Discovery Watch session is available via YouTube or Podcast.
Nevada Expl Inc has decided to raise $3.25 million through a $0.13 unit with a full warrant very similar to the $3.3 million financing done in December 2020 at $0.125 which is now free trading. Their last update was May 3 in which they described what had been encountered in hole #1 to a depth of 954 m even though the hole was already at 1,300 m at the time. What Wade's geological word salad described did not sound promising. When I talked to him a few days later he helped me understand the geometry of what they found in the hole spotted on the east side of the Water Canyon Corridor. OK, so you have a major V-shaped kink in the stratigraphy somewhere within your Water Canyon structure which you think is very similar to the Post fault in the North Carlin district. And you are too far east to hit the East Golden Gorge target whose CLM unit is what you think is the SGV district's equivalent to the Wenban5 of the Cortez district, or the Popovich of North Carlin, or the Komis of Getchell. No, no, no he insisted, I don't know yet what is happening, the last 300 m of core boxes just showed up and you are wasting my time. We need to open the boxes and log the core. Well, you are at 1,300 m and your maximum depth plan was 1,400 m. I trust you will kill the hole and start #2 to the south which you know will hit the CLM within the East Golden Gorge target as soon as you know #1 is a bust? We will decide based on what is in these boxes and what our XRF unit tells us about the arsenic and antimony in the remainder of the hole. That was the last contact I had with anybody at NGE who knew what was going on with the first hole of 2021. I was rather pissed to hear last week that they were still on hole #1 which was started on March 3. Why are you wasting time and money on this hole which we last heard was stuck in the useless Goodwin limestone moving parallel to the bedding? By the end of the week they had killed the hole and on Tuesday announced the very dilutionary PP which puffs FD up to 238 million. Why don't you give us an update about what the bottom third of hole #1 encountered? Uhh, using MY favorite stalling word when I'm trying to remember what to say next, we need to close this financing first. Why, because Wade is stupid and you just wasted another 3 weeks and God knows how much money grinding an extra 100 m out of hole #1 because this is a science project? Uhh, JK, you are being rude and unfair. So my thinking is, Wade is not stupid, and they know the $3.3 million raised in December is not enough for the 10 holes they need to make or break the East Golden Gorge target, and, for that matter, the entire South Grass Valley play, so they must have been learning something very useful in the bottom third of hole #1. Maybe they hit the CLM and it screams with arsenic and antimony way more than in all the other holes drilled farther west from the Water Canyon Corridor. But that is not material, and potentially misleading, because a correlation between Carlin pathfinder elements and gold has not yet been established at SGV which is way outside the established trends. And assays are still 6-8 weeks down the road. They know nothing other than geological context. You are on your own JK until we get this PP done. So what I first did is create a crude cartoon for my subscribers to help them make sense of the May 3 update. I am super curious about what happens between 1,000-1,400 m within the Water Canyon Corridor. But more curious about hole #2 for whose spotting they will have better information and which should hit the CLM sooner and shallower.
Then I said to myself, the market thinks this giant altered Lower Plate window that's been pumped with Carlin type fluids over a large area is not fertile with gold. But what if that is just an artifact of the entire system being under gravel cover, with the fluid path streaking northward on the eastern flank of Grass Valley, just like the Post Fault in the Carlin Trend, just no outcrop in the path of the fluid flow? And what if John Muntean is right that wherever crustal faults tapped the mantle, gold enriched brines with all the Carlin pathfinders would have worked their way to the surface and dropped their gold payload into the right structural and geochemical traps? What if the East Golden Gorge target hosts a zone equivalent to the Deep Post, Meikle and Rodeo zones mined underground within the Goldstrike system in the Carlin North district? What would that be worth as a 3,500 tpd underground mine? So I constructed an Outcome Visualization for that wishful outcome. The Members Only Version includes all the parameters, but the Public OV Version only captures the outcome and how to price it in terms of the rational speculation model and the fact that SGV is still at the target testing stage. But the graphic below is all most people need to know about the upside potential if NGE delivers assay evidence that the SGV system is indeed pregnant with gold. With one extra tidbit; the financing struggle NGE has had to endure over the last couple years has created an overhang of 75 million warrants at $0.18-$0.50 (including the current PP underway) which would raise $19 million. That would be more than enough to confirm South Grass Valley is part of a new major Carlin "trend" and it makes 238 million fully diluted a limit for predicting the future stock price. So this financing is critical. If the 7-10 holes into the East Golden Gorge do not confirm a major gold discovery by the end of 2021, we can walk away. On the other hand, if we get a discovery, the OV shows what sort of upside lies in store, and this does not include a North Carlin equivalent scenario where an additional 40 million ounces at 2-4 g/t is available for future underground mining.
Disclosure: JK owns Scandium Intl and Nevada Expl Inc; Scandium Intl and Nevada Expl are Bottom-Fish Spec Value rated Favorites, Harfang is a Good Spec Value rated Favorite
