Zacapa Resources (TSX-V: ZACA)(OTC: ZACAF) CEO Adam Melnik on Upcoming Maiden Drill Program at South Bullfrog Gold Project in Red-Hot Beatty District, Nevada


Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO of Zacapa Resources — Mr. Adam Melnik. Adam, it's great to have you back on. How are you today?

Adam Melnik: Fantastic, Gerardo. Very excited to be here with you. Thanks so much for hosting us.

Gerardo Del Real: Let's get right into it. Congratulations are in order. You have secured your final drill permits for the South Bullfrog gold project in Nevada. That's a big deal because you are in elephant country, and I wanted to have you back on and really explain to our audience what comes next. 

You have a phenomenal technical team. You have some really, really robust targets. You're in Nevada. You have a slew of gold ounces all around you. And now, we get to find out what's underneath your ground. Can you speak to that a bit?

Adam Melnik: Absolutely, Gerardo. This is a pinnacle opportunity for our investors and shareholders. Our technical team has worked extremely hard over the past year doing all of the diligent geochemical and geophysical sampling and a survey assessment. And we've done a fantastic job targeting. 

We believe we're on top of two very interesting, very highly prospective areas, which we now have fully permitted to go and drill. Those areas are Shingleback and Longtail, and we're within 5 to 10 kilometers of about 10 million ounces of gold in the Beatty district. And we're really excited to hit the ground with our inaugural 3,000 meter drill program at South Bullfrog.

Gerardo Del Real: You talked about the nearly 10 million ounces of gold in the Beatty district. Now, I think it's important to highlight that there should be four new mines in production here within the next three years. This isn't a district that is just all exploration and isn't going to seek production anytime soon. 

It's interesting to me that all four new mines that are supposed to be in production start from near surface — the mineralization does. They're all open pit oxide gold deposits, and the production costs are in the first quartile of the cost curve. I want to speak to your target. Is that what you're looking for? Are you looking for a similar type of mineralization?

Adam Melnik: Absolutely, Gerardo. At Shingleback — our target in the northwest of our South Bullfrog project — we're drilling structure there. We've got a very clear fault system at play where there's historical shafts and adits that prospectors put in place to explore and potentially produce gold from this district. 

We're looking at depth. We're looking about 200 to 300 meters down these fault systems where we know, from the IP surveys that we did, that there's very large resistivity and chargeability zones of interest, which we've targeted at Shingleback. 

And we're looking there for gold mineralization that would be relatively high-grade, still oxide, but might deliver a similar result to what Corvus Gold was seeing at its Yellowjacket and North Bullfrog projects. So tens of meters at tens of grams per tonne would be an excellent result from the Shingleback prospect.

The Longtail target area — which we just received a notice level permit for — looks a little bit more like a quite famous new discovery in the district like Silicon, which AngloGold just released an updated resource for last week. 

And that discovery was basically through the identification in hyperspectral of a large clay altered cap on top of an epithermal system, which hosted very little gold at surface in the geochem but, at depth, hosts now more than 4 million ounces of gold. 

So our target at Longtail is very similar to Silicon where we have a substantial amount of alteration at surface — alunite and kaolinite outcropping with elevated mercury — and actually some of the highest gold results we have sampled at surface. 

And we're going down to test a very large one kilometer strike-length by half a kilometer wide body of rock mass that has potentially been destroyed magnetically. Magnetite will be destroyed through alteration that would've come up in an epithermal setting and potentially deposited gold at depth.

So we're going to go and test this very large zone of high resistivity, low-mag beneath this altered cap and, potentially, intercept results such as what AngloGold was seeing at Silicon and its discovery there. So two very different targets but both that look like the two new mines that AngloGold is about to go and build.

So AngloGold is working on bringing North Bullfrog into production. There are a couple of million ounces there and a PEA around that project. They're putting out a PFS and bringing that into production within the next couple of years. And, obviously, last week, we've just seen that AngloGold has updated the resource and upgraded the resource at Silicon. 

There's now about 4 million ounces in M&I and Inferred at Silicon. And they're looking at producing a PFS and an integrated plan with the Merlin deposit that it's also working on an inaugural resource for, as well, and an integrated mine plan.

So, definitely, our targets are very similar to what AngloGold has either acquired or discovered themselves at North Bullfrog and Silicon and is planning on putting into production in the next couple of years, Gerardo; near surface, open-pittable, high margin gold ounces in a mining-friendly district of Nevada.

Gerardo Del Real: I love being early to stories and buying when no one is really looking or paying attention. It's how you maximize gains in this space. You mentioned Corvus; you mentioned AngloGold. I think it should be noted that AngloGold took Corvus out for nearly C$400 million in January of 2022. Where's your market cap right now, Adam?

Adam Melnik: Less than C$10 million, Gerardo. We are definitely the best way to get early stage exposure to new discoveries in the Beatty district. The next smallest company in this district is Augusta Gold, which has a market cap of C$100 to C$150 million, depending on the day, and is the next obvious target for consolidation. 

Our market cap below C$10 million — with the permitted drill programs and discovery potential that we have at our project — could give investors a very interesting multiple on their money as we execute on our drill program.

Gerardo Del Real: If I'm right about the gold price in the second half of this year, you're going to have a lot of momentum. Adam, always a pleasure. Looking forward to having you back on once you define the actual exploration drilling program and get details out on that. Anything to add to that?

Adam Melnik: Well, we do have a very clear program, Gerardo. We've got four permitted pad locations at Shingleback and three permitted pad locations at Longtail; a 3,000 meter program, fully permitted and well-planned. 

We're looking forward to executing on that and delivering some very compelling and interesting and accretive drill results for our investors in the near-term. Thank you very much for your time, Gerardo.

Gerardo Del Real: I love all those words! Let's see what Mother Nature left behind. Thank you for yours, Adam.