Categories:
Precious Metals
Topics:
General Precious Metals
Headwater Gold (CSE: HWG)(OTC: HWAUF) CEO Caleb Stroup on New Deal with Newcrest & a Catalyst Rich 2023
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, great to have you back on. How are you today?
Caleb Stroup: Doing great. How are you doing?
Gerardo Del Real: I am doing well. Thank you for asking.
I have to congratulate you on, and I said this off-air, a very, very shareholder-friendly structured deal with a major, with Newcrest. You continue to execute your hybrid business model brilliantly so congratulations. You want to give us the details on the deal here?
Caleb Stroup: Yeah. So this is really structured very similarly to a couple of the other deals that we have with Newcrest and it's sort of an example of expanding this existing relationship that we have with them, including another project where they can ultimately earn up to a 75% interest by taking this project all the way to a PFS.
But on the way, they can earn 65% by spending $30 million US over a six-year period, of which 2 million is guaranteed. So from a shareholder perspective, we get guaranteed $2 million in exploration in the ground and the potential carried interest all the way to a Newcrest-sized pre-feasibility stage project with some success.
Then on top of that there's a royalty kicker as well at the PFS stage. We'll get a 1% NSR on the vendor claims that we acquired, but we also stake some additional claims that'll get a 2% NSR for the company around this.
So it's, I think, a great deal and a good example of our model, what we set out to do, bringing in high-quality partners to fund a component of our exploration while, at the same time, advancing several of our hundred percent projects on the side.
Gerardo Del Real: Tell me about the project because companies like Newcrest aren't looking for half-million ounce deposits. They're looking for big deposits that can really help replenish those reserves.
We happen to have gold firmly over the 2,000 mark now, and I think we probably both agree that it's headed much higher. I think your timing is perfect on this, but tell me more about the project and what you think Newcrest sees in it.
Caleb Stroup: Yeah. So this actually it plays into our activities down there. This is in Nevada, it's in the Walker Lane of Nevada, just south of the Aurora mine complex where we have another project under a Newcrest earn-in that was the most active project that we have been working on the last year.
So since signing that initial deal with those guys in August of '22, we drilled a big program out there last year resulting in a new high-grade epithermal vein discovery. We drilled one new zone that has four intersections of high-grade veins in it and another scout hole that hit an additional zone about a kilometer away. So that's all at the Spring Peak project.
But with that initial drilling, we learned an awful lot about the geology of that district and the prospectivity of the district, in particular, and so expanded our horizon a little bit to see if we were missing anything bigger picture elsewhere in the area.
This Lodestar project came to our attention and immediately we saw a lot of parallels with what we initially saw at Spring Peak and the sort of geologic features, particularly this silica center that represents really the very top of a potentially productive epithermal system. It's like a hot spring-type deposit that tells us that we had a really active system there. So that needs an explanation and at Spring Peak that center overlied epithermal veins and that's the target here as well.
Gerardo Del Real: Tell me about the rest of 2023. I think macro-wise, as I mentioned, you have the perfect setup. You have a top-notch management team, you obviously have been able to attract top-notch shareholders and partners. What does the rest of the year look like, Caleb?
Caleb Stroup: Busy. So we're just about to kick off a series of drill projects. Spring Peak will be, again, a big focus for this year. We've got three rigs we're planning to send out to Spring Peak, June, July or so, and so that'll be a big follow-up program there.
Concurrently with that, we'll be drilling our Midas North project, also funded by Newcrest in northern Nevada. We'll have two rigs going there about the same time, June, July.
Then again concurrent with that, early July we'll be starting at our hundred percent Katey project following up on a discovery we made there ourselves right after listing the company. So that's a very exciting one that the first hole up there and still the only hole in this target at Katey, we hit two meters of about ounce per tonne and that remains to be followed up. That was a brand new discovery and, as I say, we've only have one drill hole in it, so excited to get up there. So that's three of the four projects, I guess.
Then there's another Newcrest earn-in near Katey that we're planning on drilling as well so four projects in total. We'll have five or six drill rigs active through the summer, so not too many juniors can say that, especially this year.
Gerardo Del Real: Well, especially in the jurisdictions that you're working in, I think that's going to be more and more important as time goes on. We've seen geopolitically things get really, really tricky around the world, and I think you're most definitely in the right address.
Anything to add to that, Caleb?
Caleb Stroup: Yeah. No, I mean that was always the focus of Headwater, high-grade projects in a good jurisdiction, and that's not just because we like them. That's because that's where the majors want to work and they want to build high-grade mines. So it all starts there and we think new high-grade discoveries in a good jurisdiction will command a premium in the market.
Gerardo Del Real: It's a catalyst-rich 2023 for Headwater, a transformational year. It's a newer story, but one I think everyone should get familiar with.
Caleb, thank you so much for your time. I suspect we'll be doing this pretty often here over the course of the following months.
Caleb Stroup: Yeah, very good. Thank you.
Click here to see more from Headwater Gold