Gerardo Del Real,
Editor
April 26, 2022
Editor’s Note: Lithium discoveries of significance in stable jurisdictions will be richly rewarded by the market for years to come. Nevada Sunrise Gold (TSX-V: NEV) (OTC: NVSGF) might just be on to such a lithium discovery in Nevada. And with a sub-C$10 million market cap — and an entire valley to explore — it won’t be long before shares trade at multiples of today’s price. I spoke with CEO Warren Stanyer about the new discovery and what comes next. Enjoy.
—Gerardo
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president & CEO of Nevada Sunrise Gold, which may need a name change soon, Mr. Warren Stanyer.
Warren, I've been waiting for several years to have the conversation where I'm congratulating you on a discovery, and sir, I can't think of a better time to have a new lithium discovery, in Nevada of all places. Congratulations, your stock is up over 100% already. I suspect it's going much higher. Congrats to you and the team.
Warren Stanyer: Thanks, Gerardo. It's been a journey, that's for sure. We started in lithium, we were a bit ahead of the curve. Lithium was having a resurgence in 2015 but by 2018 it had declined and there were a lot of naysayers about where the electric car market was going. Production of cars was low. All of these things were working against us so we just basically put everything into cold storage and we kept certain claims alive. But here we are today with some lithium in sediments that's got a significant value of lithium. Even though it's raining outside, I'm walking on sunshine today.
Gerardo Del Real: Let's get right into it. Let's go with all of the attributes that could make this a significant, significant win for shareholders.
First, let's start with your market cap. Even after being up some 100% today, you have a market cap of around C$12 million. Two, this project is 100%-owned. This isn't a project where you can earn into 50% and then you have these extraordinary work commitments. It's 100%-owned. So that's the second thing.
The third thing is it's in Nevada, and the infrastructure is top notch. Getting to and from is going to be easy. And four, we have a lithium megatrend.
I can't think of a more positive backdrop to be launching what will soon be likely an aggressive exploration program. Let's talk about the two holes, let's talk about the 950 PPM lithium over 200 feet, and then let's talk about what comes next. I know that's a lot, so I'll let you provide the context.
Warren Stanyer: Okay, so where should we start? What's the first part?
Gerardo Del Real: Let's start with 950 PPM lithium over 200 feet and the fact that this comes at an inaugural drilling program where we haven't seen this type of lithium mineralization in this part of this valley, right?
Warren Stanyer: That's right. So I guess our theory was when we looked back at the clays that we had seen in the Clayton Valley, we were drilling on behalf of Advantage Lithium and operating a project there at what we called Clayton Northeast. It was right on the edge of the Silver Peak lithium mine. We saw this green clay that hurt the drilling progress a lot because you have to go fairly slowly through it. The driller was complaining. We ran some of it and it ran 1,400 parts per million lithium. This is five years ago and it was more of a nuisance. And at that time, the development of processes to extract lithium from that kind of material hadn't really developed yet.
Here we are, five years later, knowing that these processes are beginning to succeed as far as we can tell. When we saw it in the Gemini drill hole just over 300 feet, we thought, "Well, this is good. Let's rush some samples." We did that and we immediately established that we had a high of 1,950 PPM lithium, which that's like ringing the bell at the county fair when you slam your hammer down. Ran some more samples above it in another clay layer and they weren't quite as high but it all averaged out to 200 feet of 950 PPM.
Gerardo Del Real: Tell me about the staking because you were very, very quick to recognize that you had something significant here and you went out and you staked a total of 5,420 acres over the outline of the gravity low. And I want to talk about that as well to cover, effectively, the possible extent of the lithium-bearing clay layers.
If we're talking 5,420 acres of gravity low, what does that imply as far as potential here? And again, I want to caution it's early stage; we're two holes in. Excellent results but let's talk about the potential here.
Warren Stanyer: Well, it's a big area. I'm looking at a map right now, looking at what we covered. The story of the gravity low is that a geologist that we worked with, John Kerr, saw a glimpse of an abstract. An abstract is a name for a summary paper of a larger paper. And that abstract was on the internet and here was this picture of these twin gravity lows. We didn't know where it was. This was back in 2015. So we researched it. We contacted the author of the paper, Dr. John Aldo from the University of Texas, Dallas, and he lives in Washington State. He came up and met with us. We staked these gravity lows. At the time we're looking for brines, we don't know what's in them, but a gravity low is certainly what you want because, in other words, there's less dense material. You don't want the densest material, which would be bedrock or cobbles, boulders, and things like that. Here we have a gravity low that we've completely covered and near the heart of that gravity low, two holes have found what we now understand is what's causing the gravity low and the conductivity. We had done conductive tests on the gravity low but never drilled a hole.
Back in 2016, when Advantage Lithium was optioning into our properties, they didn't touch Gemini because at the time it was 50% Eureka Resources, 50% Nevada Sunrise. What we eventually did was buy out the Eureka 50% from what became Kore Mining. They have gold interests in California and British Columbia. All of a sudden now in the low period, we had 100% of this but still what do we do with it? We have geophysical information but what do we do with it? Lithium hadn't reared up again yet. Not until the Green New Deal, late 2020, that's when things really started moving again.
Here we are a year and a half later and right now lithium is just exploding. Everyone I talk to about lithium, whether it's presidents of other companies, they're raising money, they're excited, the market's excited. It's just really provided an exuberance that we've been missing. That's a long response to your question but that's how it came about. Two holes is just the beginning. We're sending in amendments to our BLM notice of intent to drill and we'll devise a much larger program.
Gerardo Del Real: You talk about the analytical results from holes one and two suggesting that the lithium-bearing clay layers at Gemini may be widespread. I think it should be noted because I failed to mention it, and it's important; you have water rights on this project as well. Is that correct?
Warren Stanyer: That is. And it is a very important thing to have water rights in Nevada because if you have a property and you're drilling and you're getting good results, without water you have no possibility of developing it. It just won't happen. Unless somebody who has water rights comes for you and takes you out. In the Clayton Valley, I know there's a lot of companies that hope that happens to them, that either Albemarle or Cyprus Development would buy them out, because both of those companies have water. They're the only two.There's a third gold mining company that has a water right as well but it's not big enough to do what's required in this style of mining.
We have an 80 acre-foot water right which is small but it's because the Lida Valley was judged by the USGS back in 1968 to have not as much water in it. Well, in 2017, we drilled at Jackson Wash, which is in the Lida Valley with Advantage Lithium's earn in money, and we were still hitting water at 2,000 feet. The USGS had no knowledge of that in 1968. There was no way. The only data they had was from ranchers and towns that would drill a 300 or 400 foot well or something like that. We know there's more water at depth, so what we can do is apply to expand and gain new water rights and gain more water. Plus we're right on the edge of the solar energy zone that the BLM has set up, which is where a whole power station can be built. Right now, there wouldn't be enough power; it's just one little power line that comes into the town of Lida. It's probably the most thinly populated place you could ever imagine. Where we stayed at Gold Point, which is a small ghost town, a mining town, the population is seven. They have power and they have water and that's about it.
Gerardo Del Real: Exciting times. Again, this C$12 million market cap isn’t going to hold. I know it's only a couple of holes, but frankly, the amount of quality early stage work that went into developing the test for these two holes was very, very rigorous. You should be commended for that. Your team should be commended for that. I think the market is just starting to wake up to the potential here. When do you anticipate the drill bit getting back out there? I know you mentioned the amendment to the Bureau of Land Management, the BLM, to the drill permit. When do you anticipate hearing or when do you hope to hear a response to that amendment?
Warren Stanyer: Well, we can still work with the permit that we have on at least one location. But now that we know what we know about the conductive layers and where they might be, we want to run more geophysics. Hopefully that'll be within the next month, so by the Queen's birthday, as we say in Canada, which is May 24th. Queen Victoria, that is, that's our holiday. By that time, we should know more about the extent of the conductive layer. Then we can plan more holes. Then we could submit the amendment. But on the original permit we have, we can drill at least one more hole. But if you're going to mobilize a drill, you want to do more than just one so it's going to take a little while but not that long.
Gerardo Del Real: A little while, but not that long. Exciting times as I mentioned. I anticipate drills turning within the next month or two. Congratulations, sir.
Warren Stanyer: Yeah. Thank you, Gerardo. It's been an exciting morning.
Gerardo Del Real: We'll chat again soon, I suspect.
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Gerardo Del Real
Editor, Resource Stock Digest