Nevada Exploration (TSX.V: NGE, OTCQX: NVDEF) is a junior gold explorer that is committed to leading Nevada’s next wave of gold discoveries. NGE is unique among its peers in the junior gold space in terms of the technology it is implementing to find gold and the areas of Nevada in which it is looking for gold. Most of the 200+ million ounces of gold that have been mined in Nevada have come from deposits located in or near the exposed bedrock settings in Nevada’s mountains that are relatively easy to explore.
While this easy gold is gone, according to NGE President James Buskard, at least half of Nevada’s gold endowment still remains to be found beneath Nevada’s valleys. NGE has been working for over a decade to find the next large economic gold resources in Nevada using a proprietary groundwater detection technology which specializes in identifying gold and other precious metals beneath covered settings.
Nevada produces more gold per unit area than any other place on the planet:
Nevada Exploration believes that Nevada’s remaining gold endowment presents the most compelling exploration opportunity today, and that the key to exploiting this opportunity is finding the tools to explore undercover at a lower cost than its peers.
We had the opportunity to connect with Nevada Exploration President James Buskard last week to get the full scoop on NGE and its plans for 2016.
CEO Technician: Please tell us about Nevada Exploration.
James Buskard: I’ll start by talking about why we got started and what brought us here. There is nowhere on the planet that has the same density of multi-million ounce gold deposits as North-Central Nevada, some people like to talk about the Carlin Trend, though the geologic area of interest extends beyond simply the Carlin Trend. The low hanging fruit that provided these discoveries have predominantly come from the bedrock in or near the exposed mountain ranges that make up about 50% of the State, and the conventional geologic toolkit works very well in these exposed areas. However, those tools are not particularly well suited for exploring the other half of Nevada’s bedrock, the half hidden beneath its valleys.
As a result, fully 50% of the world’s densest concentration of gold deposit is sitting there underexplored. This is why we started Nevada Exploration, to capitalize on the opportunity to discover gold in the underexplored half of one of the world’s most prolific gold mining districts. So we asked ourselves: what can we do differently in order to find the gold deposits hidden in Nevada’s covered valleys?
Since at least the 60’s, uranium & base metal explorers have conducted water well sampling to analyze the groundwater chemistry in as a tool to search for pathfinder elements dissolved from and representative of bedrock in covered settings. While groundwater chemistry has become a common sense and cost-effective tool to explore in covered settings and has been used to discover other commodities, it had never been used for gold exploration, so we had to ask why is that?
Gold is not very soluble, it doesn’t want to go into solution and it doesn’t want to stay in solution, and as a result, the concentrations of gold that end up in the groundwater near a covered gold deposit are very small. The lab tools needed to analyze groundwater directly for gold at these ultra-trace levels simply were not available commercially until recently. With the improvements in lab detection limits that have arrived thanks to the latest generation of mass spectrometers, everything has changed, and today we can analyze gold in groundwater down to the single parts per trillion levels required to start using groundwater chemistry for gold exploration.
We believe the gold waiting to be discovered in Nevada’s underexplored covered basins presents the biggest hidden treasure anywhere in the industry, and we are the first to develop groundwater chemistry as the tool that we believe has been missing to find this treasure.
CEO Technician: What sets Nevada Exploration apart from other junior gold explorers in Nevada?
James Buskard: Ten years ago we understood that continuing to bang away using the same old tools to search in the same old places was no longer working. So what differentiates us is that ten years ago we began this process, and we’ve now invested $15 million to develop groundwater chemistry technology and to complete the first large scale groundwater chemistry survey of Nevada. Beginning in 2004 we began collecting groundwater samples in and around Nevada’s largest gold mines and then farther out into Nevada’s covered areas. We’ve built the largest groundwater chemistry database for gold in Nevada and we’ve become world leaders in using groundwater technology to explore for gold.
There’s no one else in Nevada focused on developing a game changing technology to find the 2nd half of Nevada’s gold endowment sitting beneath its valleys. Everyone understands the challenge, as well as the opportunity, but we are the only group actively advancing and applying a new tool at the scale necessary to be successful in order to reduce Nevada’s vast covered areas down to discrete projects that deserve to be advanced.
CEO Technician: Why is it so difficult for other gold miners & explorers to identify economic gold deposits under Nevada’s valleys?
James Buskard: You can drag a drill rig out to these covered areas and poke a hole into the ground and see what you got, but the cost to do that on the scale required to evaluate Nevada’s vast covered areas is totally prohibitive. Alternatively, you can call you favourite geophysical contractor and hire them to fly your favourite geophysical survey, but you still have no direct information about whether or not there is any gold down there. Others like to take soil or vegetation sampling, but again the costs to complete that type of sampling to evaluate all of north central Nevada just doesn’t work. Limited by these conventional tools, the industry has been sitting on the sidelines waiting for a new cost-effective tool that can unlock the 2nd half of Nevada’s gold. Recognizing this incredible opportunity, we’ve spent the last ten years developing new technology to overcome this specific challenge, and we’re now using this tool to acquire and advance new projects.
CEO Technician: Tell us about some of the projects that you’re working on.
James Buskard: Our largest project is called Grass Valley, and it’s just south of Barrick’s Cortez Property, a prolific mineralized gold belt (15+ million ounces) where the bedrock to the south dips under cover and goes out into this broad valley called Grass Valley. We’ve used our groundwater chemistry technology to reduce this highly prospective, but covered valley down to an exciting project. We’ve built a land position, and along with our exploration partners have spent about $1 million on drilling, geophysics, soil geochemistry, and additional groundwater sampling to put the pieces in place to advance this project
CEO Technician: How is Nevada Exploration financed for 2016 and what are the milestones you are committed to achieving in 2016?
James Buskard: In the 2nd half of 2015 we raised over $1 million from our core shareholder base and supporters. We are parlaying that into a two pronged approach: 1. We are raising our U.S. profile with an OTCQX listing and getting our story out there. 2. Acquiring new drilling tools to radically bring down the cost of drilling, which will enable us to drill more holes per dollar in our treasury. Essentially how do we take the money that we have and translate it into as much information as possible?
CEO Technician: Have you noticed that the cost of machinery and labor has fallen in the last couple of years with the drop in commodities prices?
James Buskard: Yes definitely. The price is one thing, but the quality of drillers is also important. When things are going gangbusters you’ll pay more, you’ll get a rundown piece of equipment, and you’ll have to put up with inexperienced drillers. Right now you can get good drillers and good equipment at a relatively good rate, but there is more to this discussion.
The fallout from the Bre-X scandal and others is that with all the new 43-101 reporting requirements the industry got scared. We now have to have so many checks and balances that anytime a company reports any type of drill results it’s got to be of very high accuracy and precision. The problem with that is the cost to achieve that level of precision is very high. It’s sort of like the 80/20 rule, you can get 80% of the information for 20% of the cost. But the regulation that’s in place means that we basically have to know things down to 5 decimal places, so we have to spend another 80% to get the final 20% of the information.
The industry needs to embrace rough and ready drilling tools able to provide quick information to narrow down the field of focus. Most of the time we are trying to eliminate ground in mineral exploration. Spending .20 on the dollar to get some quick information is where it’s at, and this is the next trend we’re trying to lead in Nevada – again, looking for ways to take a small treasury that we have and get as much information as possible.
CEO Technician: What is the scale of the opportunity in Nevada’s covered valleys in terms of recoverable gold ounces?
James Buskard: 200 million ounces have already been produced from Nevada with the industry primarily focusing on its exposed mountain ranges. As the industry switches to focusing on the covered valleys I don’t think it’s unrealistic to expect that another 200 million ounces will be mined from Nevada. Our premise is that half of Nevada’s gold endowment is still waiting to be found.
CEO Technician: So essentially Nevada Exploration is attempting to find the next big gold discovery in Nevada without spending $50 million of shareholder capital to get there?
James Buskard: There’s some very good research that’s come out over the last couple of years about how the mining industry has been performing. And it all points to the fact that historically the more the industry has spent the more discoveries have been made. However, during this last cycle more people spent more money looking in more places than ever before and yet what we’ve seen is a continued decline in discoveries. So trying to do the same things in the same places by just throwing more money at it isn’t working.
The name of the game now is using new tools in new places and finding ways to reduce the costs of exploration. How do you spend less money and get more information while evaluating more area? This is the premise upon which we founded Nevada Exploration and it’s even more true now than it was then.
CEO Technician: Nevada Exploration is an interesting story that makes a lot of sense given the trends in gold discoveries and exploration costs. We look forward to following the NGE story in the future and keeping readers apprised of NGE’s progress. Thank you for your time James.
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