Categories: Energy
Topics: General Energy

Nevada Sunrise Becomes Lithium & Gold Project Generator

June 20, 2016

Nevada Sunrise Gold (TSX-V: NEV)(OTC: NVSGF)(website) is a project-generator with six prospective lithium properties next to the only producing mine in North America and three prospective gold projects in one of the best mining jurisdictions in the world, Nevada. On June 20, 2016 Nevada Sunrise Gold announced a joint-venture deal with North South Petroleum that allows North South the option to earn-into five of its lithium properties and the option to acquire a 100% interest in a strategic water rights permit.

The Company’s three key gold assets include a 21% interest in a joint venture with Pilot Gold Inc. (TSX: PLG) at Kinsley Mountain --which has assays pending -- near Wendover, a 100% interest in the Golden Arrow project near Tonopah, and a 100% interest in the Roulette gold property in the southeastern Carlin trend near Ely.

Nevada Sunrise CEO Warren Stanyer joined us to talk about the news release and what it means for shareholders:
 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining us today is Warren Stanyer, President, CEO, and Director of Nevada Sunrise Gold. Warren is a mineral exploration industry executive with over 20 years of experience in Canadian public company administration. Warren, thank you for joining us.

Warren Stanyer: It's a pleasure, Gerardo. Thanks for inviting me.

Gerardo Del Real: Warren, it's been a few weeks, maybe a month since the last time we chatted and it's been a very active year for Nevada Sunrise. You've done an absolute excellent job of putting together some very prospective lithium projects and you've been also able to secure some very strategic water rights. Just this morning, you issued a news release that announced you were optioning the lithium assets to North South Petroleum. Can you share with us the details and why you feel this is the best way for shareholders to participate in the upside, while mitigating the dilution and the potential downside that can come with exploration.

Warren Stanyer: Thanks, Gerardo, I will. What we have become is a project generator and really because there were so many opportunities when we first started in the lithium space and we didn't want to watch them go by so we picked up as many as we could with the funds that we had, but literally, it doesn't take many months before you spent a million dollars. At that point, you start thinking about recovering some of that and avoiding the dilution that raising money brings. I think this is a really good outcome for these lithium properties and their early stages. There's a lot of money that has to be spent and we found a partner that's willing to do that.

Gerardo DelReal: Fantastic. Can you share with us a little bit of the details of the deal and the way that it was structured because I thought it was very interesting that there were several layers to it. Can you talk to us a little bit about that?

Warren Stanyer: Sure. The North South Petroleum Corp has the option to earn 51% of three of our properties, 50% of the Gemini property, they can also get 50% of the Neptune property. At this point, by spending C$3 million dollars, they can actually go to 70% of some of those properties, whereas they would be held to a 50% interest at Gemini and a 50% interest at Neptune. For that, C$600,000 dollars in cash in Canadian funds would be payable to us and we would also be issued 4.9% of the issued outstanding shares of North South. That's a really good deal for us, we get cash from it, the exploration expenditures which to earn 51% in the initial stage is C$1.5 million and then another C$1.5 to C$3 million dollars gets them to 70%. We're not out of the properties at all, with the exception of Gemini where we fall back to a 2% NSR or GORR, Gross Over Riding Royalty.

Gerardo Del Real: Correct. Excellent. Now I understand that the water rights, you've been able to secure some very strategic water rights in an area that is very short on water frankly. Can you tell us a little bit about the option that North South will have in regards to the water rights?

Warren Stanyer: What North South would do is step into our shoes in terms of this water rights deal. We've paid $125,000 dollars US. in cash. We've issued 200,000 shares of Nevada Sunrise, so that still leaves 1.8 million shares of Nevada Sunrise and also 1.175 million US. dollars, so that's a lot of money, that's a lot of shares, and North South is willing to step in and make these payments on our behalf.

Gerardo DelReal: That's fantastic, Warren. Now can you tell me a little bit about the work commitment that comes with the deal because a part of what excites me is that the properties will be seeing exploration, they'll be seeing drilling without the dilution that typically comes with that, so that's exciting and shareholders should be excited for that. Can you explain a little bit to us about the work commitments that you're going to see on the properties?

Warren Stanyer: The work commitments will be divided between the properties. The way we look at these targets is they are quite large, the properties are quite large, but really in two to three or four holes, you would have a very good idea of whether there are lithium brines on the property, depending on where you're drilling at. Neptune we've drilled two holes and we have additional targets, for example, that would either prove or disprove the presence of lithium brimes. The other projects it's the same. It might be two holes, it might be three, by having five projects for North South to explore and we could be bringing more into the pipeline as well. I'm being approached all the time by prospectors and people that have areas of interest for lithium. I just think it's a very good way to keep the pipeline moving, rotating, drilling on different projects. With good science and some luck we could make a major discovery.

Gerardo Del Real: Fantastic. Now, Warren, as I mentioned earlier you've been busy. I believe you just closed a C$500,000 dollar private placement here last week as well. Is that correct?

Warren Stanyer: That's right. Just last week we started that process in late May and almost right on its heel came this discussion that led to paper being exchanged and led to a deal with North South.

Gerardo Del Real: Fantastic. The other two bits of news that I'd like to talk about briefly is there was an approval for a plan of operations at Golden Arrow so you've essentially become a project generator with the lithium portfolio, but you also have some very prospective gold projects. One particularly Kinsley, which I'm excited to get initial assays for, but Golden Arrow got an approval for a plan of operations. Is there anything you can add about the gold aspect of the portfolio?

Warren Stanyer: We've got some very good properties. Kinsley Mountain brought a lot of excitement two years ago and it tapered off a little bit. It's deeper targets where the high grade mineralization is difficult to actually hit those targets and find the best places, but Pilot has been doing a lot of modeling in the last 6 months, that's PilotGold Inc. on the TSX. They are 79% partner we are 21%. Some targets were generated from all the data that's been gathered and we spent close to ten million I believe has been spent now by Pilot and us at Kinsley since 2012. This is a very good project that has a lot of unexplored areas as well.

At Golden Arrow, there's 300,000 ounces measured and indicated of gold. It's a mining district that saw a lot of exploration in the mining say even a hundred years ago. It was left alone, abandoned, a ghost town, people came back in the 1970s, 80s, 90s, we have a lot of data from that time and we've done some geophysical surveys that lead us to believe there's a lot more potential there.

Also we have the Roulette property in Eastern Nevada in the Carlin Trend at the very southeastern end of the Carlin. There's gold in jasperoids on surface which that's like a lighthouse for gold deposits in Nevada. This is an under-explored property. It's had a couple of drill holes in the past, nobody even knows where they were. It's been that long. We look at it as a grassroots property, we've done some geophysics there that shows conducted bodies. We're doing some soil sampling, a little more geophysics and we plan to drill it. That's Roulette.

Gerardo Del Real: Excellent. I know we have assays pending at Kinsley Mountain. Can we hope for assay results here in the next three, four weeks, any idea Warren?

Warren Stanyer: It's something like that. Pilot being the operator, they control the flow of information. We do have some joint venture meetings planned and that's when we'll look at the results of the drilling and I'm sure there will be disclosure shortly after that.

Gerardo Del Real: Fantastic. Warren, thank you so much for coming on. Once we get those assays I'd love to have you back on so we can talk about that. It's been a very busy first half of the year, it's obviously shaping up to be a very busy second half of the year. I'm excited, I'm sure that you're excited and shareholders should be very excited.

Warren Stanyer: I am excited and I feel that we brought a lot to the company with this deal. It does allow us to spend not only, still time on the lithium where we act as managers of these projects and charge a fee for that, but also we can turn back to our gold projects in this better gold market. This is a very good thing for us.

Gerardo Del Real: Fantastic. Warren, thank you so much for your time. We look forward to having you back on soon.

Warren Stanyer: Thanks, Gerardo. My pleasure.