The 3 most important aspects of any investment in the mining sector are management team, location (quality of project), and share structure. Even the best project in a bad location/jurisdiction won’t work out for shareholders, and a bad management team can screw up the best project in an ideal location/jurisdiction. It’s rare for a junior mining stock to be able to check all three boxes and when I find one I usually double-check my work (due diligence) and if it all checks out I begin building a position.
Nevada is the by far the best region/jurisdiction for gold mining. One only needs to study the world’s largest gold producers Barrick and Newmont, and the value they have generated for shareholders through their Nevada gold mines. It is estimated that more than 160 million ounces of gold have been mined historically in Nevada, and Nevada still remains the #1 gold producing state in the United States. If Nevada was a country it would be the 4th largest gold producer behind China, Australia, and Russia.
The Fraser Institute ranked Nevada #1 in its 2018 mining attractiveness survey of mining regions around the globe:
Nevada is gold’s king state and Nevada gold assets are highly sought after and tend to command premiums at takeout not seen in other jurisdictions across the globe. Simply stated Nevada is the place to be for gold mining & exploration.
The Carlin Trend alone has produced more than 60 million ounces of gold since Newmont Mining brought a large low-grade deposit at Carlin into production in 1961. As one can see in the map below much of the gold production in Nevada is in the northern part of the state, however, the success of Northern Empire (bought out for C$117 million by Coeur Mining in September 2018) has brought increased attention to the Walker Lane Trend and the middle and southern parts of the state:
What makes Nevada so great for gold mining? Well first of all there’s a lot of gold in the ground throughout the state. In addition, Nevada is a great place to operate because there is a pro-mining environment throughout the state; mining generates a lot of jobs and a lot of tax revenue. Companies rave about how fast they are able to get drill permits and other necessary permits to operate. Simply put, conditions are favorable for mining in Nevada and it’s easier to get things done every step of the way in the process from early exploration all the way to mine permitting, construction and operation.
While most of the attention has been paid to the northern part of the state near the Carlin Trend, the real potential may actually be in less exploited areas of Nevada. Last March we highlighted Northern Empire when the stock was trading at about C$1.20 per share, less than six months later it would be acquired by Coeur Mining for C$117 million. The fact that Coeur went out of its way to acquire Northern Empire at an all-time high share price during an otherwise challenging mining market environment speaks to the value and potential of gold assets in Nevada.
Some of the recent attention given to Nevada through the Barrick/Newmont drama led me to start looking for the next Northern Empire; a junior explorer with a highly prospective project(s) that is committed to rapidly advancing to a transaction that rewards shareholders. Nevada is the #1 gold region in the world and attractive gold assets in this state command a premium. Therefore, the key for investors is to find junior exploration stories at relatively low valuation before the market has come to fully appreciate their potential.
As I was searching through a number of companies I came across a presentation for a company that has not yet begun trading on the TSX-V. This company is Barrian Mining (TSX-V:BARI) and its flagship Bolo Project is located in one of the lesser known gold mining districts in Nevada, the Tonopah Gold District. Barrian is led by Maximilian Sali and can boast a strong management team including Jim Greig (head of corporate development) and directors Brad Telfer and Jordan Trimble.
Mr. Sali has been in the capital markets since 2009 managing private family assets. He is the president of Baccarat Investments Inc., a private company providing consulting and management services to public companies along with investing. Mr. Sali is currently the CEO, director and founder of Defense Metals Corp. (TSXV: DEFN). He was most recently corporate development for Advantage Lithium Corp (TSXV:AAL) which grew from a shell through to a positive PEA with an M+I resource of 4.8M tons of LCE. The largest lithium brine resource of any recent junior and $42 million raised to date.
Another important member of the Barrian team is Kris Raffle, P.Geo. Mr. Raffle serves as the Qualified Person for the Company and he is also a board member. Mr. Raffle is a Partner and Principal Geologist with Edmonton-based geologic consulting firm APEX Geoscience Ltd. He has over 18 years’ North American-focused base and precious metals exploration experience. The important thing to point out is that APEX has wide-ranging Nevada Carlin-type gold experience, including an extensive and impressive list of Nevada projects:
Near-mine exploration at Scorpio Gold Corp.’s Mineral Ridge Project
NI 43-101 reporting for Battle Mountain Gold Inc.’s Lewis Project and Barksdale Capital Corp.’s Swales Project
Consulting and geological modeling for NuLegacy Gold Corp.’s Red Hill Project
Completion of multiple Mineral Resource Estimates for Gold Standard Ventures Corp.’s Pinion, Dark Star, and North Bullion deposits within their flagship Railroad Project.
APEX’s current Nevada activities include modelling and resource estimation work for several projects on behalf of Waterton Global Resource Management Inc., and Fiore Gold Ltd.’s Gold Rock Project.
Barrian was founded by Sali and Telfer with the objective of building a Nevada gold explorer with a set of proven and highly prospective assets. Bolo, Barrian’s flagship asset, is located 90 kilometers from Tonopah and features Carlin-style gold mineralization (sediment hosted disseminated gold deposits) on a 3,332 acre land package. There have been 67 RC (reverse circulation drilling is common in shallow oxide deposits) holes drilled to date at Bolo totaling 12,212 meters with some highlight holes below:
DH-BL-38, 133 meters of 1.28 g/t gold from the surface, including 30.5m of 3.24 g/t gold (drilled in 2017, targeted based on mineralization outcropping at surface)
DH-BL-39, 90 meters of 1.0 g/t gold from surface including 40.9m of 2.05 g/t gold
DH-BL-41, 52 meters of 1.27 g/t gold from surface
DH-BL-54, 58 meters of 41.13 g/t silver from the surface (incl 7.6m of 220 g/t Ag)
These results are encouraging especially considering that there have only been two drill programs carried out at Bolo. The property package remains under-explored and Barrian plans to carry out a modern geophysics program this summer (including IP and CSAMT), in addition to 1,700 meters of drilling. Geophysics has never been done at Bolo and Barrian has already begun its maiden geophysics program at Bolo. The results of the geophysics work will then be compiled and used to refine drill targets before drilling begins at the end of May.
Barrian has an option to earn up to 75% of the Bolo Project through a multi-stage earn in agreement:
The nice thing about this earn in agreement is that the exploration spend in the first two years is relatively small and manageable. Once Barrian has gotten to know the Bolo Project much better and generated substantial geophysics data and drill results the company can make a much more informed decision as to whether it spend the C$3.25 million (in exploration expenditure and stock) required to gain 50.01% of the project by the end of 2022. Another nice feature of this agreement is that spending can be accelerated at anytime in order to achieve a faster earn in.
Barrian also has a gold & silver project in New Mexico called “The Sleeper Asset” in a historic mining district of New Mexico that has more than 300,000 ounces of gold and 15 million ounces of silver mined historically. The Sleeper Asset was renamed such by Barrian founder/CEO Max Sali because on the surface it doesn’t look like much, but then you realize this area has seen a lot of historical high-grade production. In addition, the gold mineralization starts at 50 meters depth as opposed to being at surface like it is at Bolo. Barrian will be doing initial geophysics work at Sleeper later in 2019 and wait until 2020 to conduct a drill program. Sleeper has no exploration spending commitments, instead there are four $250,000 share payments due each year between 2019 and 2022 in order for Barrian to earn 100% control of the project.
Barrian has a tidy share structure with 36,000,000 shares fully diluted (5.7 million shares are in escrow for 3 years and cannot be traded until they are released from escrow) that includes 23% ownership by management/insiders and another 40% owned by close associates of the founders and management team. This leaves about ⅓ of the stock in the hands of private retail investors. That’s a relatively tight trading float which means the share price could move up very quickly, especially in the first four months when the IPO shares are still not free trading.
At the IPO price of C$.20 Barrian has a fully diluted market cap of C$7.2 million which is about as cheap as it gets for junior gold miners with assets in Nevada. The valuation looks even better when you subtract out the cash that Barrian has in its treasury (C$2 million) which gives an enterprise value of C$5.2 million. If you’re a Barrian shareholder at C$.20 per share you’re getting in on the ground floor with a company led by a young and hungry management team that has the commitment, knowledge, and skills to move Barrian forward and create shareholder value in the process. Considering that founders shares are locked up in escrow for 3 years there is no plan to make a quick flip – Max Sali and Brad Telfer are committed to creating a formidable Nevada gold explorer that creates value both through M&A and through organic growth via exploration.
The article is for informational purposes only and is neither a solicitation for the purchase of securities nor an offer of securities. Readers of the article are expressly cautioned to seek the advice of a registered investment advisor and other professional advisors, as applicable, regarding the appropriateness of investing in any securities or any investment strategies, including those discussed above. Barrian Mining Corp. is a high-risk venture stock and not suitable for most investors. Consult Barrian Mining Corp’s SEDAR profile for important risk disclosures.
EnergyandGold has been compensated for marketing & promotional services by Barrian Mining Corp. so some of EnergyandGold.com’s coverage could be biased. EnergyandGold.com, EnergyandGold Publishing LTD, its writers and principals are not registered investment advisors and advice you to do your own due diligence with a licensed investment advisor prior to making any investment decisions.
This article contains certain forward-looking information and forward-looking statements within the meaning of applicable securities legislation (collectively “forward-looking statements”). Certain information contained herein constitutes “forward-looking information” under Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “expects”, “believes”, “aims to”, “plans to” or “intends to” or variations of such words and phrases or statements that certain actions, events or results “will” occur. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed by such forward-looking statements or forward-looking information, standard transaction risks; impact of the transaction on the parties; and risks relating to financings; regulatory approvals; foreign country operations and volatile share prices. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Actual results may differ materially from those currently anticipated in such statements. The views expressed in this publication and on the EnergyandGold website do not necessarily reflect the views of Energy and Gold Publishing LTD, publisher of EnergyandGold.com. Accordingly, readers should not place undue reliance on forward-looking statements and forward looking information. The Company does not undertake to update any forward-looking statements or forward-looking information that are incorporated by reference herein, except as required by applicable securities laws. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions. Junior resource companies can easily lose 100% of their value so read company profiles on www.SEDAR.com for important risk disclosures. It’s your money and your responsibility.