Nevada Exploration Inc. (TSX-V: NGE; OTCQB: NVDEF): Exploring for Large New Carlin-Type Gold Deposits in Nevada; Interview with James Buskard, President
|
By Dr. Allen Alper, PhD Economic Geology and Petrology, Columbia University, NYC, USA
on 3/29/2019
Nevada Exploration Inc. (TSX-V: NGE; OTCQB: NVDEF) is integrating hydrogeochemistry, with conventional exploration tools, to develop a Nevada-specific regional-scale geochemistry exploration program. Using its proprietary technology, Nevada Exploration has completed the world’s largest groundwater sampling program for gold exploration, to evaluate Nevada’s covered basins for new gold exploration targets. The Company then developed its Scorpion drill rig, a small-footprint, truck-mounted, small-diameter RC drill rig, specifically tailored to the drilling conditions in Nevada’s basins. We learned from James Buskard, President of Nevada Exploration, that in 2019 they’re looking to advance all three of their major projects: South Grass Valley, Grass Valley, and Kelly Creek.
Nevada Exploration Inc.
Dr. Allen Alper: This is Dr. Allen Alper, Editor-in-Chief of Metals News, interviewing James Buskard, who is President of Nevada Exploration Inc. Could you give us at Metals News and our readers/investors an overview of your Company? Share your vision, goals and approach to exploration. Explain why exploring in Nevada, using hydrogeochemistry, is so important and has so much promise for the future?
James Buskard: There are two pillars to the story. If we look at Barrick and Newmont’s recently-announced Nevada joint venture, they are combining three large gold deposits to create the world’s largest gold complex, which together are going to produce more than 4 million ounces per year! If we look even closer at these three deposits, they are all the same very specific style of gold deposit, they are Carlin-type gold deposits. These Carlin-type gold deposits can be huge. They are the deposits for which Nevada is now famous, and they are now the specific, laser-focus of this Newmont and Barrick JV.
The challenge that we face in Nevada, is that once we understood the architecture of these systems in the early 80's, the industry became very good at finding them. Through the 80’s and 90’s, the industry found another large Carlin system, about every couple of years. As these discoveries were put into production, Nevada's annual gold production increased more than 20 times, from relatively unimportant amounts, to almost nine million ounces. The discovery of Carlin-type gold deposits supported an incredible run-up in production and solidified Nevada as one of the world’s most prolific gold producers.
Nevada’s importance is often highlighted, but what few discuss is that Nevada’s gold production peaked in '98, which reflects the fact that discovery rates began to drop after the late ‘90s. The industry had done a great job of exploring the State’s exposed (near-surface) bedrock areas, where we can see the rocks or get close to the bedrock. But, once this low-hanging fruit was found, discovery rates have crashed. We're down to finding about one new Carlin system per decade and Nevada’s production has now fallen 40 percent.
While these deposits are incredibly huge and incredibly important, the truth is we haven't been able to find many more of them. They're getting old. They're becoming depleted. We need to find more of them. That is the second part of this story, getting back to finding large, company-making, Carlin-type gold deposits in Nevada.
More than half of Nevada's bedrock is covered beneath tens to hundreds of meters of sand and gravel in the valleys. The bedrock in these valleys is equally prospective, in terms of its mineral endowment, to the bedrock we can see in the exposed, mountain regions. Because the bedrock is hidden, our conventional exploration toolkit doesn't work. There is an equivalent endowment of large Carlin systems, waiting to be found in the valleys of Nevada. We need, as an industry, to find new exploration tools to go after the next round of Carlin discoveries.
Dr. Allen Alper: That sounds like an excellent approach. Could you tell our readers/investors a more about the systematic approach you're using?
James Buskard: There are two types of exploration tools: detection tools and prediction tools, and we have to use both. As explorers, it's our job to constrain these big areas, focus targets and ultimately drill targets. It's our job to spend our money wisely. We're always evaluating the best tools to answer the different questions we need to answer at every scale of investigation. In exposed bedrock settings, you can see the rocks. You can bang off a rock sample and send it to a lab. They will analyze it for gold and pathfinder elements. When the bedrock is covered, we can't use those direct detection tools. So the pendulum has swung over to prediction tools, mainly geophysics. We just love flying sensors from planes and helicopters. Now the subject of the day is artificial intelligence and machine learning. These types of predictive tools will continue to be important, particularly as we understand the architectures of these systems, and try to reduce big areas into smaller areas that we can explore. But, if we're going to be successful in opening up these large covered areas, we need to compliment these predictive tools with direct detection tools.
That's the importance of groundwater chemistry. Because the lab tools are now so good, the detection limits we have available to us have come down by orders of magnitude. Today we can analyze sampling mediums that were not available to us decades ago. We believe the most important new sampling medium is groundwater. Groundwater is the universal solvent, as it flows and mixes in these big valleys, because these valleys are not just filled with sand and gravel. They're also filled with groundwater. As the groundwater flows and interacts with the covered bedrock, whatever the geochemistry and mineralization that exists in the bedrock, groundwater dissolves small portions of that and gives you a signature of that in the groundwater.
Because groundwater flows, it drags these signatures downstream. Instead of needing to look for something that's perhaps two to three hundred meters across, the actual gold mineralization of bedrock, we're able to respond to fingerprints and signatures in the groundwater that can extend three, four thousand meters downstream. The groundwater mixes and dilutes and eventually, after a few thousand meters, these signatures disappear. Before they disappear, they enable us to enlarge these systems, by maybe ten times. With footprints ten times bigger, we can find them with ten times fewer samples. The cost to drill a hole to collect a water sample is about one one-hundredth of the cost of drilling a hole for a conventional bedrock sample. So we need ten times fewer samples. Each sample is 100 times cheaper. Now we have a radical increase in how we can spread our exploration dollars, across huge areas, to be systematic in order to respond to direct concentrations of gold. This isn't a predictive tool. This is a direct detection tool.
And it's relatively low cost to use over a very large area. We continue to use both type tools, including geophysics, and we have now added a detection tool that can be used in covered areas. So we really feel that we've been able to put together a complete undercover toolbox. That's what we're using now to look for large, new Carlin-type gold deposits in the half of Nevada, where the bedrock is covered beneath sand and gravel.
Dr. Allen Alper: Exciting! It sounds like you and your team have the right tools and right background to look for Carlin-type gold deposits in Nevada. Are there certain trace elements that you look for that are indicators of where an old formation might be?
James Buskard: Yes. If we're focusing on Carlin-type systems, Carlin-type gold deposits have a characteristic suite of pathfinder elements that are associated with them: arsenic, antimony, mercury, and thallium. So we certainly pay attention to those. But at the end of the day, the best pathfinder for gold is gold. And the analytical tools in the labs are good enough that we can now respond directly to gold in groundwater, down to single digit parts-per-trillion concentrations. So yes, we pay attention to the full suite of trace elements, but what we've found is the most important pathfinder that we respond to is gold itself.
Dr. Allen Alper: That sounds excellent. Could you tell our readers/investors a little bit about your gold plans for 2019?
James Buskard: Having completed an extensive groundwater sampling program, across the north central part of Nevada, home to the large Carlin-type systems, we've built a portfolio of exploration targets. Three of which we control currently with large land positions, each approximately 50 square kilometers. So we control a total of about 150 square kilometers, in three projects, in the heart of the Carlin trends in Nevada. Our goal for 2019 is to move all three of these projects forward. South Grass Valley is a project that we've drilled over this past winter. Now we’re ready to begin the next phase of drilling there. So we'd like to get that done. At the north end of the same valley, we have a project called Grass Valley. It's ready for large, wide space, orientation holes to map the bedrock in this covered setting, and to begin to test it by sampling all of the groundwater, the gravels covering the bedrock, and the bedrock. So a large, wide space drilling program at Grass Valley, will likely be the next step.
Our third project is Kelly Creek. After finishing a large scorpion drilling program, which is our proprietary in-house early stage drill rig, we constrained that target in 2017. It's now ready for a deeper drill hole program to follow-up on large areas of tenth of a gram gold in bedrock that we have in two areas of that project. In 2019, we're aiming to see all three of these projects being moved forward. That's our goal.
Dr. Allen Alper: That sounds excellent! Could you tell our readers/investors a bit about your outstanding, accomplished team, your background, the Management and the Board?
James Buskard: I’m happy to. My background is on the environmental science and hydrochemistry side. I teamed up with Wade Hodges, our CEO, as well as Ken Tullar, our COO, in 2004. Wade was a long-time senior exploration geologist with Santa Fe over an important period of time, when these large Carlin systems were being found in the 80s and 90s, and Wade and his team were responsible or involved in the discovery of more than 30 million ounces of gold in Nevada. On the Board we're fortunate to have an independent technical director, Dr. John Larson, who was at BHP for many years, as their global porphyry copper exploration manager. He understands that the future of exploration, around the world, is going undercover and so he is a big supporter of what we're doing. Recently, a couple of weeks ago, we announced the addition of a technical advisor, Simon Griffiths, formerly with Barrick, as Barrick's chief global geochemist, involved in many of the geochem programs around some of Barrick's large Carlin deposits in Nevada. He has been a very good addition as we begin to understand the architecture of the Carlin type targets that we're advancing.
From the management, to the Board, to our technical advisors, we've been fortunate to put together a world class team.
Dr. Allen Alper: That's excellent. Could you tell our reader/investors a bit about the share structure? I know the management group has a lot of confidence in what you're doing. And you have a lot of skin in the game.
James Buskard: We have about 80 million shares outstanding, trading at 25 to 30 million Canadian dollar market cap, and we've had very strong insider participation all along. Most of our rounds of financing have included insider participation, and insiders continue to control about a third of the company. So it's a team that's motivated by making a discovery, we feel our interests are certainly aligned with those of our shareholders because we are shareholders.
Dr. Allen Alper: That sounds excellent. It good to see Management has skin in the game and believes in what they are doing in their company and invests in their company and believes in their company. Could you tell our readers/investors what are the primary reasons they should consider investing in Nevada Exploration?
James Buskard: Yes. From 2007 to 2016, over that ten year period, worldwide, for every dollar that was spent on exploration, explorers only found 47 cents worth of value. So exploration has become an exercise in value destruction, because explorers are going after the last marginal ounces, tons, pounds in mature search spaces. If we, as an industry, are going to return to creating value, we need to figure out how to get back to finding large, new, needle moving discoveries, and this requires that we open up new search spaces. The industry is facing the same transition that the oil and gas industry faced 50 years ago, where the oil and gas industry had to go from onshore to offshore. The transition we face in mining exploration today, is that we have to move from being able to operate and explore in near-surface environments to being able to operate and explore in covered environments, where the bedrock is hidden.
Understanding that that is the future of the industry, we are the only exploration company that has positioned itself to build the tools, and execute the programs and build the land positions to provide an opportunity for investors to participate in what we believe is the next chapter in the industry.
Dr. Allen Alper: That sounds excellent. That's an excellent position to be in, to be in the forefront of exploration. James, is there anything else you would like to add?
James Buskard: Yes. I'd like to highlight our recent drilling results at our South Grass Valley project. South Grass Valley is at the southern end of the valley, immediately south of Barrick's Cortez complex. This is a 44 million ounce complex that produces more than a million ounces per year. And immediately south of there, Grass Valley is a 500 square kilometer, completely blind search space, where the bedrock is hidden beneath sand and gravel. Using our groundwater chemistry exploration program, we've focused this large valley in this important part of the world and reduced it down to two projects, which today are our Grass Valley and South Grass Valley projects. We continued to complete more sampling in and around South Grass Valley to focus the target even tighter. And this past winter, we put the first drill holes into the project, the first round of wide spaced drill holes, we've tested for the architecture required in order to support a large Carlin system, which are the right sort of limestone host rocks, lower plate host rocks, major structural complexity, significant hydrothermal alteration, indicative of large amounts of fluid flow, and a trace element pathfinder package consistent with what you'd expect if there were a large gold deposit there.
So with very clear objectives for first round drilling, we completed about 4,000 meters this winter. And over the last few weeks we've been able to share with our stakeholders that not only did we check all of the boxes in terms of our objectives of the program, the size of the system is even bigger than we had imagined. So what we have now is one of the largest Carlin style mineralized hydrothermal systems, not currently within the portfolio of one of the majors. We believe we have demonstrated not only that this is an exciting new exploration project for Nevada, but also that this has implicitly validated the entire workflow, right from the basin-scale generative program down to the drill beds. So we're very excited to be able to validate our entire workflow here.
Dr. Allen Alper: That sounds exciting. It sounds like 2019 will really be an important year for Nevada Exploration. Is there anything else, James, you would like to say in summary?
James Buskard: Yes. I'd like to highlight that there's been a lot of focus on Nevada, over the last few weeks, with the news around Newmont and Barrick. And there're a lot of groups active in Nevada that like to tell the same statistics about how Nevada produces more gold than South Africa, more gold than Mexico, more gold than Canada. It's a very incredible gold producing jurisdiction that produces something like 19 ounces per year, per square kilometer and there's nowhere on the planet that produces that sort of density of production.
But if you look at where that endowment comes from, of the 250 million Carlin-style gold ounces in Nevada, 85 percent of those ounces cluster in the north central part of the state, from four camps; Cortez, Carlin, Turquoise Ridge-Getchell area, and Jerritt Canyon. Everything else in Nevada is relatively insignificant compared to these large Carlin camps. So when investors are interested in positioning themselves to be involved in a Nevada story, I think it's important to remember where those ounces come from.
They're not distributed evenly. And so I'd encourage investors to focus on looking for projects, companies and management teams that are going after these large Carlin systems in the north-central part of the state and recognize that not every style of mineralization, not every district in Nevada is equal in terms of its mineral endowment.
Dr. Allen Alper: That sounds like an excellent approach.
James Buskard: Thank you for interviewing me on Nevada Exploration Inc. for Metals News. I appreciate it.
Dr. Allen Alper: I enjoyed talking with you. I admire what you are doing. We’ll publish your press releases as they come out so our readers/investors can follow your progress.
https://www.nevadaexploration.com
Email: info@nevadaexploration.com
Telephone: +1 (604) 601 2006
|
|