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New Placer Dome Gold (TSX-V: NGLD)(OTC: NPDCF) CEO Max Sali on Completion of Base Shelf Prospectus & Upcoming Exploration and Drilling Plans for Flagship Kinsley Mountain Gold Project, Nevada
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO and founder of New Placer Dome Gold — Mr. Max Sali. Max, it is great to have you back on. How the heck have you been?!
Max Sali: Well, I'm alive! As you’ve just said, it's been a while since we spoke. I think it's been, I'm going to say, two months since we've had an interview — at least. So it's been quiet.
And so it's good to be able to give the market an update now that we've got our big base shelf prospectus out of the way. And that was a big process. But here we are, alive and ready to go with our 2021 drilling outline and the base shelf filed and ready to take some capital and move forward.
Gerardo Del Real: Let's get right into it. Listen, we've been very transparent with each other and shot straight. And the bottom line is the gold price went through a consolidation that led to a consolidation in the entire sector.
New Placer Dome Gold ended up on the short end of the stick share price wise because it happened to coincide, as you mentioned, with a quiet period. It wasn't quiet for lack of activity behind the scenes. But it was quiet as it related to the drill program; as it related to the base shelf prospectus that you just touched on.
For those not familiar with what you've been doing behind the scenes — including buying a boatload of stock which I know shareholders appreciate — walk us through what the last two months have been setting up. And then, let's talk about what it looks like moving forward because, I mean, the stock is on-sale right now.
Max Sali: So from a corporate perspective, we've been very busy, obviously. To the public eye, it looks like we have not. But behind the scenes, what we've done is we’ve filed the base shelf prospectus. And to put that into perspective, it's another two, two-and-a-half month process.
You first have to file your annual information form, which, pretty much, we had to include an update. All of our technical drilling, all of our data, everything we did last year had to be fully updated so we could publish the annual information form.
Following that, we published a base shelf prospectus, which was the preliminary version. That was then sent to the BCSC. They sent us back questions and a technical question. We sent it back to them with the responses. Then, they sent us back with some G&A questions and corporate questions. We sent it back with the responses. And then, they give you final approval.
But what the benefit of the base shelf prospectus is — and it's becoming very common now with a lot of smaller companies despite being tedious and expensive — it allows you to access capital almost immediately. And it's much more beneficial for funds and investors and anyone because it allows you to offer a free trading financing — unlike a private placement which has a form of lockup — and offer the investor a warrant on that too.
So the same as if you went and you bought 100,000 shares in the market. This time, you can buy 100,000 shares in the finance and get a warrant with that. So it's like a nice little sweetener. The nice thing about it, too, is it allows us — for a 25-month period — to access capital almost immediately.
So for the base shelf, we applied for C$20 million. We do not have to take that on now. But just say we have some good results from Kinsley coming out in November, December, or whatever it is… we know the labs are back up… we can automatically access capital at that time whether it's C$1 million, C$2 million, or C$3 million for an investor that liked the results and said, "I want to participate more!"
Gerardo Del Real: Let's talk about where that capital will go. You outlined, as you mentioned, an exploration program that will include new target drilling on three new discoveries and a significantly expanded program of IP and resistivity geophysical surveys.
When I visited the property, you and I had a conversation… and it's something that I wrote-up to subscribers… was that the one thing that was clear to me is that you had to rush that initial program last year to make sure you secured the rigs. And that led to not being able to really select the trenching and the geophysics and the vectoring tools that you typically would pick before a drilling program.
It seems like this time around, you're committed to that, which should lead to a better hit rate, right?
Max Sali: Yeah. So what happened is, when we took on Kinsley from Liberty Gold, Liberty Gold actually had their full-blown exploration program with targets chosen. That was essentially done back in 2013. Obviously, the market came off; Kinsley went on the back burner. And what we did for 2020 is, essentially, we went and drilled Liberty’s targeted areas; we did their full program last summer.
What Liberty Gold — or the company “Pilot Gold” at the time — didn't really do was a lot of geophysics. Now, they had tremendous success; they discovered the Western Flank in 2012 which is where you have 300,000 ounces [of gold at] 6 grams [per tonne] and a deeper sulfide. But the recovery rates are great; the metallurgy is great. And they kind of walked away from the oxide to focus on that… so they had a lot of success doing that.
What we went and did at the end of our program was some geophysics. And we shot geophysics on our Bolo property, which was very effective; very, very effective. We were super efficient at Bolo. However, Kinsley is substantially bigger. I remember when you and I spoke after your trip to Kinsley, you said, “You could be drilling this thing for 10 years!”
Gerardo Del Real: Absolutely!
Max Sali: So it's just that big of a property. And so what the IP does is — if you look at our press release we have today — it really shows some good anomalies there that we want to target.
But it was super effective in the sense that… Well, why don't we go and we spend the money now on the geophysics… shoot everything over the Main Pit North and the mountain behind it… and see if we can come up with a ton of oxide targets? And so we want to do that.
We will also, while we're doing that, have an RC rig drilling the shallow oxide targets around the Main Pit North where we have that almost 10 gram [per tonne] oxide step-out discovery last summer. Drill about 10 holes, 150 meters-a-hole because we know this is the low hanging fruit. And then, once we get the data back from the IP, hopefully be able to present this with 20, 30, 40 targets in that area that are oxide.
And so it's something that we're going to spend a hefty amount on. Last year, we only spent about US$120,000 on IP. We're going to bump that to about half a million. And I think that'll really give us a better idea of where to plan our drill holes not only for 2021 but for 2022 as well.
Gerardo Del Real: I'm excited for the geophysics results. I am also excited that not only are you targeting the Western Flank Zone and the oxide pits and the Secret Spot target, but it reads in the release that you're also looking at the underexplored Kinsley North targets, which is an area that many feel has the potential for both oxide and sulfide discoveries.
Max Sali: Yeah. So, essentially, the image you see, all of the blue and gold behind the Main Pit North — that's really never been drilled at all… and they've had no geophysics shot. And so there’s the blue sky there for that because the IP worked really, really well over the Western Flank and the Secret Spot. But nothing has really been done behind the Main Pit North where Kinsley produced.
You know, like you said, Kinsley is a huge project. You can only do so much with what you have, right? If you compare Kinsley Mountain to Long Canyon — which was sold and purchased by Newmont in 2011 for over $2 billion — Long Canyon had about 120,000 meters of drilling total to get to 2.2 million ounces. Kinsley is nowhere near that amount of drilling.
And so people always say, “Well, it seems like you've drilled a lot at Kinsley, and the company before drilled a lot, and the resource isn't that big.” But when you compare it to the most profitable mine in the Barrick-Newmont JV — Long Canyon — Kinsley has a long way to go to build up the size. But the rocks are the same as Long Canyon; it’s on-trend with Long Canyon.
You know, Kinsley could be a million, 2 million ounce high-grade gold deposit that, one day, could be in production just like Long Canyon. And it just takes time, and it's a drilling exercise.
And so the geophysics should really help us with a better hit-to-miss ratio than we had last year because we simply, like you said, the market was hot; we needed the rigs; we went balls-to-the-wall and we came up with three discoveries still.
Gerardo Del Real: You currently have a market cap of under C$11 million. You own 80% of an asset, just shy of it, just shy of 80% of an asset. You have the option for just shy of 80% of that asset that at one point commanded a market cap of over C$250 million.
There is a severe disconnect between what you and I believe the potential is for Kinsley and what the market is currently assigning to Kinsley Mountain… to say nothing of Bolo, your other asset, right?
I know you've been buying in the market. Tell me a bit about what that looks like and tell me how it should progress moving forward with the geophysics. When do you anticipate getting results back from that?
Max Sali: Well, first I’ll start with my buying in the market. I bought a bit of stock yesterday and filed. And my total holdings, as of today, was 2,710,000 [shares]. I will get up to about an even 3 [million shares] before the end of the year; very shortly if I'm not blacked out with anything.
What that means to me is I've spent over C$200,000 buying my own stock in the market, which is more than my salary. And I'm buried in this; my family is buried in this; I got my friends into this. I truly believe, as I know you do, that Kinsley has the potential to be substantially bigger than it is now.
And this is not a lifestyle company where I take a salary and I don't buy any stock. I have skin-in-the-game, and if this doesn't work out, it's going to hurt me a lot more than it's going to hurt a lot of our investors.
And so my faith is that, with the drill program and the success we’ve had this year and the success of those geophysics… because if they come back successful — that is going to be a game-changer for Kinsley and give us a lot of targets.
And so the IP should start — you know, we always hate to give dates because things always change — but I'm hoping for the third week of August. And it's a big survey. So that survey is going to run probably for six weeks.
So as we start getting data and we can start releasing to the market… maybe end of September. But again, I don't like to give dates… but it's going to be a 6-week program; half a million dollar US spend. And we definitely want to — this year — really, really get that done before we start just poking holes everywhere.
Gerardo Del Real: Looking forward to it, Max. We were overdue for an update. I know that the shareholders will appreciate it. Anything else to add to that?
Max Sali: Yeah, you know, it's been tough… I almost want to puke; I probably have a few times… been stressed watching the stock going down. You know, when you're the CEO of a public company and the stock is doing what it's doing — you don't have a lot of friends. But when the stock is going the other way — everybody loves you, right?
And so, last summer, everyone loved it. And this summer, everyone was kind of frustrated. But I think the base shelf really gives an opportunity for investors to either come in as new investors at a substantial discount to what the stock was at last summer; get a warrant; free-trading position, which is much safer than being locked up.
And it also allows our other investors to average down with that free-trading paper as well.
And, you know, this is something that everyone deserves to have an opportunity. If people don't participate — I can't tell people what to do — but I think there's an opportunity now at a C$11 million valuation where we can really go and make some people some money.
Gerardo Del Real: Well said. Max, thanks again for the update.
Max Sali: Thank you very much for your time.
Gerardo Del Real: Alright, chat soon.
Max Sali: Thank you.
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