New Placer Dome Gold (TSX-V: NGLD)(OTC: NPDCF) CEO Max Sali on Successful IP Results Ahead of Phase-Two Drilling at Flagship Kinsley Mountain Gold Project, Nevada
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO of New Placer Dome Gold — Mr. Max Sali. Max, it's been a bit. I know you've been busy. How are you?
Max Sali: Like you said, very busy; slightly stressed out and working on getting this financing done here for the company to move forward.
Gerardo Del Real: Well, let's talk about it. You and I had a very frank conversation over the summer. I went and visited the property. I was impressed by the scale of it. I made mention to you that you could drill this for a decade and not find everything there is to discover at Kinsley Mountain.
This is a property that I've been very vocally supportive of for years now. And the one thing that I felt was missing — and in part, it was because of the market at the time — but the one thing that was clear to me that was missing from the prior drill program is the vectoring in with other tools outside of the drill bit, right?
And by that I mean trenching, geophysics, surface work. Some of that wasn't done because of the fact that there was a rush to get contractors. And there was a scarcity of supplies at the time. And the decision was made — and I think it was the correct one — to go get a drill rig… get that thing turning.
You made some hits; you had some misses. You now have deployed an IP geophysical survey that is already bearing fruit. I would love to talk about that. And then, we can talk about the financing and how that's coming along.
Max Sali: Yeah, I guess so the thinking with this is, last year, we did drill blind most of the time because we weren't getting back the results so we didn't know where we were hitting and where we weren't.
Something that was never really previously done on the Kinsley Mountain gold project was geophysics. When we did it for Bolo — which was originally our flagship asset years ago — it was very, very successful. And when we went and drilled Bolo, actually, our hit-to-miss rate was very low. We hit on, I think, on our first program, 100% of our holes.
And so what we did is — obviously, Kinsley Mountain being significantly bigger than Bolo — it required a significantly bigger program. And that's what we decided to do. We did a few IP lines last year that came up with some good chargeability anomalies.
And we figured, let's go this year; get a big, big survey done and see what happens. And so right now, we're doing 31 kilometers of line over the top of the Kinsley Mountain gold project.
We are getting data back almost daily and compiling it. And so the turnaround for that is significantly faster than if it was a drill rig.
And so, for example, we started the geo for this on September 18th. We put out a press release yesterday with the results of the first two lines. And so it's about two to four lines every two weeks we're getting done depending on how long the lines are and where they are. But the results are starting to come out. And the results are good.
This is doing exactly what we said; show us that there's some chargeability anomalies in the ground. It should light up like a Christmas tree. And that's what it's doing. And what that is doing is generating us new targets.
And so now, knowing what we know now, we can go in there with a drill rig and really go for the home run. And I think that's what the game plan is… is wait until all of the data is back — all 31 kilometers of the lines — and then make a decision; where should we go and drill that home run?
Gerardo Del Real: The first two lines have already detected pretty significant chargeability anomalies that coincide with the Secret Canyon shale rocks, right? And that's important, I think, for people to understand because the Secret Canyon shale, as you and I know, is the main host of the high-grade sulfide gold mineralization at WFC and at Secret Spot.
Can you speak to that a bit and just how encouraged you are, this early on, to be getting those types of results?
Max Sali: Exactly. And so what these lines did is they kind of connected the zones between Secret Spot and the Western Flank Zone. And that is what we want to see… is that there is continuous chargeability anomalies between the two zones, down lower, which is the high-grade sulfide.
And that's good for us because, as you said, it's a big project… we could drill it for 10 years! This is just helping us define more targets. And if we can put a big picture together at the end of the day saying, ‘Hey, look at the size of what could be at Kinsley,’ that's what people want to see is show us that you can connect the zones and show us that — on the other side of the past producing pit, the main pit north — that that whole area has never been tested for anything. Nothing has really been done besides some small soil samples.
And so if we can light up the whole back of that mountain, that just truly shows the scale of how big Kinsley could be. And if you compare Kinsley to Long Canyon — which was Fronteer which got bought out by Newmont… and then, that team came and actually was Kinsley — Kinsley had a larger Indicated main resource than Long Canyon.
And, over time, Long Canyon has now grown to about 3.5 million ounces. And so, to show us the size of Kinsley… it’s a drilling exercise. Now, hopefully, we can tighten up those drill holes and really show you the size of the project.
Gerardo Del Real: Canyon was bought out for, I believe, just over C$2 billion. Where is your market cap today, Max? And then, let's talk about the financing because I know you have a pretty supportive partner in Liberty that's helped out immensely and supported the financing and the project both technically and financially.
Max Sali: So the market cap right now is about C$7.5 to C$8 million, which is laughable and pukeable at both times. I don't have to tell you this, but when I speak to every broker and banker in the sector right now… I think everyone's kind of sitting down just puzzled wondering what's going on with the gold price. It seems like everything that should be making gold go up is not working. And so it's kind of confusing.
But what you're doing now is you're bottom feeding and picking these extremely undervalued assets at a time when no one is giving any love to gold. And you're able to buy this, like I said, a C$7 to C$8 million valuation because of that, too, and because of the results of the IP, so far, insiders from Liberty Gold, including Cal Everett, are writing checks into the financing.
Following this financing, Liberty Gold will own about 18% of the company. That will be locked up for at least a year. And they have been nothing but a great partner with us. They are very impressed with what we're doing, and everyone understands the markets are tough.
And so we want to move forward together. We want to all work together — along with Nevada Sunrise — and make sure that we can show people what this project can really do. And I know, for you, that's been 10 years in the process. And I don't think waiting another year is going to hurt. But at some point, it would be nice to see the fruits!
Gerardo Del Real: Yes, it would! C$7 to C$8 million market cap; this asset at its peak commanded a market cap of approximately C$250 million. Of course, the analog is Long Canyon; a multibillion-dollar asset.
Listen, I'm not saying it's going to be a multibillion-dollar asset. I'm not even saying it's going to be a C$250 million asset again, although it has a good chance of doing so. But there's a lot of runway between C$7 and C$8 million and C$250 million. And I think that's the opportunity here.
And I think we've seen it in the uranium space recently; you buy when no one is looking. You wait; the cycle will turn. It's a very cyclical space. And I think better days are absolutely ahead for the share price and the project, and I'm looking forward to the results from this. Thanks again, Max.
Max Sali: Thank you very much, Gerardo.Click here to see more from New Placer Dome Gold Corp.