New Placer Dome Gold (TSX-V: NGLD) CEO Max Sali on Transition from Barrian Mining & Aggressive Upcoming Drill Programs at Kinsley Mountain and Bolo Gold Projects in Nevada

July 2, 2020

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO, Director and Founder of New Placer Dome Gold (TSX-V: NGLD)(OTC: BARRD), Mr. Max Sali. Max, how are you today?

Max Sali: I'm fantastic, Gerardo. Nice to be here.

Gerardo Del Real: I appreciate you taking the call. We've always had very frank and honest discussions, and we like to be that way and operate that way. I got familiar with New Placer Dome back when it was Barrian when you went public. Again, to be completely transparent, I had some issues at the time with the initial setup of the share structure. I just want to get that out of the way, because everything you've done since then, two big thumbs up. I think your timing has been excellent. 

But can we talk about Barrian and the transition into New Placer Dome and the setup share structure-wise?

Max Sali: Yeah. Barrian came trading on April 29th, 2019. In terms of timing, I think we're a little early to the market the way it is now, but we had a phenomenal asset in Bolo that we acquired from Allegiant Gold. It was an asset that was sitting there and not really anything happening with it. So we got the asset, we drilled the asset in 2019. Small program. Again, we were a small junior at the time, had a market cap of around $10 million. Drilled Bolo, highly successful 2019 drill program. 

We released all the results to the market October, November. Stock had a pretty good run. But as you can see the price of gold going, what we really felt we needed was a transformational asset and not just acquiring another option or something. We needed a big asset to really move the needle on Barrian.

In November I started chatting with a gentleman by the name of Cal Everett who runs Liberty Gold Corp. As of this week, Liberty Gold now has a $500 million market cap. They are actually our largest shareholder. As part of this transaction that we just did with them, we issued them 9.9% of our outstanding float. They'd be our largest shareholder. 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.

Gerardo Del Real: Absolutely. Kinsley was very good to me. We'll talk about why I think it's going to be very good again.

Max Sali: Exactly. 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. 

But in terms of the share structure and kind of how this came about is we had to go and obviously finance this massive asset. May 4th we announced a non-brokered financing. We were looking to raise $7.5 to $10 million. The market was just starting to pick up again for us. We ended up raising $12.35 million. We had $15 million-plus in orders, but we had to cut it off at some point. So we cut it off. We closed on the money. We came trading June 4th.

I think the big difference between Barrian in December when we announced the deal and New Placer Dome now that we did the name change, is in December we were out of money, we had no Kinsley. we had no cow, we didn't have a big partner and we were kind of dead in the water unless we got this transaction done. 

As you know, and as the world knows, COVID really hit hard. We figured, how do we get this done in this brutal market? What we did is we were patient and we waited. So we timed it right, we went to the market, we raised more than enough money. So essentially what happened is you were buying an asset with $6.3 million with no money and no Kinsley. 

Now we have an asset with a post financing done. We are $0.46 we hit yesterday. 90 million shares out. So $40 odd million dollar market cap with $10 million in cash in the bank after we paid our initial fee for Kinsley. We have a $4 million US drill program at Kinsley, which was fully funded. We have an amazing shareholder list. 

The cream of the crop came into this financing. I've had a lot of help with this financing through some very good mentors of mine, including Cal. I've met some very large ones, institutions. We now have 4 funds that are in this transaction. We have very, very high-net-worth investors. My family personally came into this financing for over $1 million dollars. I bought stock in the market since we came trading. Unfortunately, my lawyer has said now the whole board is blacked out for the rest of the year because we start drilling soon. As much as I would love to keep buying stock in the market, that is kind of how much work we will be doing on this project. We are going to be hitting this project very hard in the next few weeks with drill results starting in September.

Gerardo Del Real: So Kinsley is the flagship, just to be clear. I know we mentioned Bolo and we could talk about the work program there because that's going to be important moving forward. But the flagship is Kinsley mountain, correct?

Max Sali: Yeah. Now that the transaction is done, we are fully focused on Kinsley. 85% of our budget this summer is going towards Kinsley and the rest is going towards – about $750,000 US – is going towards Bolo with $4-plus million going towards Kinsley.

Gerardo Del Real: That initial drill program's going to consist of 15,000 meters of RC and approximately 5,600 meters of core drilling, correct?

Max Sali: Yes. We have two super tens on site, July 15th. Those rigs can handle the deeper drilling. 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.

Gerardo Del Real: Well, 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?

Max Sali: 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.

Gerardo Del Real: Absolutely.

Max Sali: 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. We're now $0.45, $0.46. He's up 100% in the value of his shares since we issued them.

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. Essentially, what we are doing is we're working with the Liberty technical team to confirm these targets. We will put out a press release very shortly with the exploration plan for Kinsley. Probably within the next week or so.

Gerardo Del Real: I'm looking forward to that, Max. Just to summarize there, the drills will be turning approximately July the 15th. You anticipate assays to start coming in around September. Just like your timing, frankly, and making the pivot and acquiring the 80% interest in Kinsley, I think that your timing as far as assays is going to be impeccable considering the gold market that I think, well, that I know we're in and what I think will be happening between now and September. 

Let's talk about Bolo because that's the second property that is obviously an important part of this story. Though Kinsley will be the focus and the flagship immediately, you also have the Bolo project, which is an important one for the company.

Max Sali: Bolo is a very exciting project for us. Both Bolo and Kinsley are Carlin. Kinsley is more on the Carlin trend. Bolo is in the middle of Nevada, it's way off the Carlin trend. But so far the results have shown us it is a Carlin-type asset. All oxide from surface. We drilled this last summer. It was a safer drill program because we had a smaller budget, but we hit on every hole. We hit a new discovery at depth around 220 meters. We hit 12.2 meters of 3.2 grams gold oxide at that depth. 

That's showing us that it doesn't turn from oxide to sulfide, which is a very good sign for us in having this Carlin-type asset. It could potentially be open pit heap leachable. What we're doing this summer is we have more money. We're doing a 3,500-meter drill program at Bolo. What we're trying to do this summer is go deeper and deeper and see if we can hit more new discoveries at depth, and try and connect a few of the zones where last summer we didn't have the budget to do so. We are drilling both assets at the same time. 

So for us, the nice thing is we're going to have consistent news flow between Bolo and Kinsley. So total three rigs, one on Bolo, two on Kinsley. For a junior my size to have three rigs in Nevada in the safest, best mining jurisdiction in the world in an $1,800 gold environment, we are an extremely aggressive team. You're not going to find that of any other junior, my size period right now.

Gerardo Del Real: Max, well said. Congratulations on the pivot. The acquisition of Kinsley, raising the money. It's easy to forget now that we have such a robust market, how challenging it was to play those cards right and be patient and do it the right way. Kudos to you and the team for executing on that front. 

I look forward to having you back on to talk about the targets at Kinsley, because I know there are several there. I know that's coming shortly and hopefully you'll come back on and join us.

Max Sali: Well, I appreciate your time. Thank you for interviewing me.

Gerardo Del Real: Thanks for your time, Max. Chat soon.

Max Sali: Thanks, Gerardo.