Headwater Gold (CSE: HWG)(OTC: HWAUF) CEO Caleb Stroup on High-Grade Gold in Initial Results from the 2023 Spring Peak Drill Program, Nevada


Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president and CEO of Headwater Gold, Mr. Caleb Stroup. Caleb, it's great to have you back on. The last time we chatted was in person at Beaver Creek, and we talked about your background and we talked about the approach to drilling at Spring Peak. You wanted high grade, you wanted to see if the geologic model held up and you hit the veins where you thought they would be. You accomplished all of that. You hit the high grade, you found the veins where the geologists thought the veins would be, and we talked a bit about the markets off-air. The stock goes down a couple of percent. One day does not make a trend, and we know the market will turn, especially with gold headed to where I think it's headed. But you got to be happy about these initial results.

Caleb Stroup: Oh, for sure. Yeah. And these are just the initial four holes. And so I mean, we viewed this as a big success here. What we did was take four holes from last year, build the geologic model off of that, and in the first holes this year demonstrated that we understand the geometry of the high grade mineralization and offset it 70 meters in the first hole. And it's still open in both directions along strike and down dip, and we've got 20 some more holes either drilled or in progress right now to chase this thing.

Gerardo Del Real: Let's talk about hole 17, right? That's the first step out from last year's drilling and you encountered two types of grades there, right? Can we speak to that a bit and then just how you're interpreting that right now?

Caleb Stroup: Yeah. Well, it's quite consistent with last year's drilling where we hit what we call the Disco Zone, which is from a 20 to 40 meter thick mineralized structural zone that most of it, or nearly all of it has decent gold grades in it. But the thing that's most interesting is in last year's drilling and in this hole 17 result, there are two individual zones of high grade gold in there, roughly 10 gram per tonne type material up to, I think the highest sample in hole 17 was over 20 grams. So we know that there's high grade gold within that corridor. We know that the corridor in general tends to be mineralized throughout it, and it's still open along strike and down dip. And really we're just beginning to chip away at understanding the distribution in the high grade and where the best zones might be.

Gerardo Del Real: Look, every company and every set of geologists, when they take on a project and they start drilling into it and they start modeling it, there's always an analog, right? And the analog always tends to be ambitious because of course you're not going to have an analog that isn't significant or potentially economic because that would make no sense. But what is the analog here with Spring Peak?

Caleb Stroup: Well, I can answer that in a couple of different ways. I mean, we are immediately adjacent to the past producing Aurora mine complex, and that was a very high grade, historically mined vein system. Basically the same geology as we have at Spring Peak. However, there's not a ton of detail known about the geologic setting there in the underground mine scenario because it was mostly mined before 1900, in the old days, but it was multi ounce per tonne, high grade epithermal veins. So we know that potential is here in this district, and we can look farther afield, maybe just still within Nevada, to like the historic Midas mine complex, where Newmont mines a couple of hundred thousand ounces a year out of a big high grade underground vein. Fantastic high grade, high margin deposit. And we think there's more of those to be found in Nevada, and that's what we're looking for.

And you can look broader afield throughout globally. There are a lot of examples of big high grade epithermal vein deposits. They typically fall within the range of say, one to 4 million ounces for an individual vein zone. But the key thing is that they're high grade and high margin, and that say even a million ounces of high grade vein can be worth as much as several million low grade bulk minable gold. So that's what we're targeting here.

Gerardo Del Real: 18 assays, I believe, are still pending. What comes next?

Caleb Stroup: Yeah, so as you can see in some of the images that we put out, we drilled a lot of holes into this zone. These are just the first four results. So we have results for 18 more holes coming out, and we'll continue to put together the geologic story. Things are evolving as we go, but really holding together quite well with what we expected based on modeling of last year's results. So we'll continue that exercise and continue to zero in on the high grade portions of this structure and bang away.

Gerardo Del Real: Good stuff. A lot of catalyst coming up outside of this program, but still a lot to discuss here. Anything to add to that, Caleb?

Caleb Stroup: No, I don't think so. I mean, it's an exciting one. We're already in the high grade and have a discovery here that is just beginning to take shape, so it's a good opportunity.

Gerardo Del Real: Well, both of us will be at the New Orleans Investment Conference here for the next several days. I encourage anyone looking for quality gold exploration exposure with a hybrid business model and a team that knows what it's doing, to go reach out to Headwater. Stop by, say hello. If you see me, I encourage all of you to stop by and say hello to me as well.

Caleb, thank you for your time as always, sir.

Caleb Stroup: Yeah, thanks a lot, Gerardo.

Gerardo Del Real: All right, see you soon. Cheers.