One of my top picks for 2020 is Nevada focused gold explorer Newrange Gold (TSX-V:NRG, OTC:NRGOF). Newrange has been busy drilling its flagship Pamlico Gold Project for the last month. Pamlico is located in the Walker Lane Trend of Nevada, in between Reno and Las Vegas.
The Pamlico project is underexplored in terms of modern exploration with no property wide geology, geochemistry or geophysics done and with only 103 shallow holes drilled on the entire property when acquired in July 2016 by Newrange. Some 300 separate, historic mine workings mostly developed during the late 1800’s explore up to 100 individual veins. Pamlico’s history mimics the early history at currently producing high-grade gold mines in Nevada including the Ken Snyder (Midas) and nearby Fire Creek mines, both operated by Klondex Mines Ltd.
From a technical chart standpoint, NRG shares have just begun to bust-out from a multi-year broad basing pattern.
NRG.V (Weekly)
During the holiday shortened Canada Day/July 4th week I had the opportunity to catch up with Newrange CEO Robert Archer to find out where Newrange is at with the summer drill program and when they plan to start drilling the "Big, Deep IP Anomaly" that has caught the market's attention...
Goldfinger: Good to be talking to you today Bob, so let's just get started with Newrange and where you guys are at today. What's going on at Pamlico and what kind of news flow can investors expect over the next few months?
Robert Archer: Well, essentially we've initiated the drill program at Pamlico. We've drilled about 15 holes to date, so the program is well underway, and it’s going well. And so far, we've been focusing on the area extending from the area of drilling in 2017 through the Pamlico mine area and into the Gold Bar mine area, so essentially along the central part of Pamlico Ridge. And well, the guys are going to take a bit of a break, but when they get back, we'll resume that drilling and we've got some more drilling to do down through the Gold Bar mine and some more holes, essentially along Pamlico Ridge. We've got a fair bit of drilling still to do along the ridge, but we're having to jump around a little bit just because of which holes or which sites are permitted and which ones for we're waiting for permits on. So logistically it's not systematic, I guess you might say, but it's going well anyways.
In terms of news flow, we're expecting our first assays, I hope this week sometime. I haven't seen anything yet, but once they do start coming in, I'll have to decide how we're going to release those. I don't plan on releasing things hole by hole. And so, we'll just have to see how it makes sense to do that if certain holes are clustered or represent a particular region or something, but we'll still have to interpret those results when they come in. So, I'm not sure exactly when the news flow will start. Perhaps if we do get results next week, then perhaps by next week. And then it should be fairly regular and systematic from that point on and for the balance of the summer because that's essentially how long it's going to take to do the drilling.
Goldfinger: Last time we talked about how you have your own shares in GoldMining Inc (TSX:GOLD) or the company owns shares in GoldMining Inc. How much cash do you guys have and how much have you monetized of those GoldMining Inc shares?
Robert Archer: Well, we've just been selling them into the markets. The deal that we had with GoldMining was, we received the first half of those shares on signing. There was a four month hold of course, but that was up in April. And so that allowed us to start to sell those shares at that time and we've been fortunate to catch this wave of rising share prices and gold prices. And even today, we're seeing GoldMining trading at and above $2, again, which reached that level back in March very briefly, but now it looks like a much stronger run. And so that's very advantageous for us, considering when we got those shares in December, when we signed the deal, the shares were valued at a dollar, seven. So we've almost doubled our money on that.
And the second half of the shares will be issued when the license for the Yarumalito Project gets transferred into GoldMining subsidiary. Now, unfortunately we're at the mercy of the Colombian government to do that and with the COVID-19 lockdowns and government shutdowns almost globally, the government offices in Colombia are still closed until sometime in July. So we haven't seen that transfer yet. It's hard to put a timeframe on that. So we won't get the second half of shares until that happens. But in the interim, we've been selling the first half and that's largely what's been financing the drill program to date. So it's just a matter of balancing in terms of cash and such as a matter of balancing the incoming funds with the payables on the drilling.
Sorry, I should also add that we're starting to see the exercise of some options and warrants as well, and the options were at eight cents, mostly insiders and consultants, and those are mostly getting exercised and the warrants are getting started as well as for the financing back in 2018. And those are at 12 cents, so they're well in the money and those expire in October. So we'll be seeing those dribbling in as well. That'll bring in about 1.3 million, just from the exercise of the warrants, so that's another source of cash.
Goldfinger: Nice. And so, tell me about the deep IP anomaly target and when are you guys going to start to drill that? I know a lot of people are really anticipating those results.
Robert Archer: Yeah, as are we. The IP really, I guess, allowed us to reinterpret what's going on at the project and where the gold might be coming from. If that turns out to be the source, then it certainly opens up to a lot of potential there. What we've been doing to date is that there are a few little fingers of chargeability high that come up from that deeper anomaly and come up right to surface. One of those correlates perfectly with the drilling that we did in 2017. And another one comes up right at the surface expression of the Gold Bar mine, and we've just drilled one or two holes into that.
So it'll be interesting to see what the correlation is between those holes and the surface expression of the IP anomaly, because as the oxidation level there is so deep, a lot of the sulfides have been oxidized and so, the anomalies that you're picking up on surface are much more subtle than they are at depth, where the sulfides are preserved. But nonetheless, the trend is still there, and so we just want to make sure that that is truly what we're seeing, and that will certainly help in the interpretation. And so, as we move along Pamlico Ridge out into the pediment zone, where there's another IP anomaly, as well as that hole that had five grams gold, those will be tested as well.
And then ultimately, we will get over to testing the larger anomaly and the deeper holes, but that'll likely require a diamond drill. And so that will come in later on in the program after we've pretty much finished the RC component.
Goldfinger: All right. And what would you say your objectives of the summer drilling is? Obviously to hit a lot of gold, but can you explain it in more detail?
Robert Archer: The main premise really is to try and get a better understanding of the controls on the gold mineralization what's actually driving it and what the trends are, because the main trend in Walker Lane is Northwest Southeast, but we are seeing some North-South trends in both the underground workings and in the large IP anomaly trends North, South. And so there's something else going on in there, structurally. And if that turns out to be the dominant trend of the mineralization, then that would explain why some of the followup holes in 2018 didn't get the kind of grades that we were anticipating, because they were following a sort of a northwesterly trend for the most part because that was in interpretation at the time.
So it's really getting a sense of the trends on the mineralization, getting a better understanding and then checking the continuity of mineralization as well, because we have these historic mines, but they're all on hills and ridges and such and we don't really know what's happening in between, so there's no sense of the continuity between yield lines and how the things turned along Pamlico Ridge, or if indeed, it's more of a crosscutting structure because Pamlico Ridge itself is Northwest Southeast parallel to Walker Lane. But if the main mineralizing trend is North-South, then it's cross cutting the ridge. So, we're trying to get a better sense of that.
Goldfinger: And so, tell us a little bit about yourself and your background and Bob Carrington's background as well, and please tell us about the team that Newridge has assembled.
Robert Archer: Bob Carrington is one of the co-founders of the company. They were working in Colombia at the time, and they worked there for about 10 years and then pulled out in 2016 to focus on Nevada. And Bob is born and raised in Reno. He's spent a good chunk of his career, which exceeds 40 years now, working in Nevada. And he's been involved in a number of discoveries there and knows the geology extremely well. And so he was the one that was largely responsible for picking up the Pamlico project in the first place through a family connection.
And then I came onboard initially as a director in 2018 and I'd been a shareholder for several years already at that point. And then Bob asked me to take on the CEO role in January of 2019. And my background is, I'm also an exploration geologist, spent 15 years with major mining companies like Newmont and Placer Dome, and mostly in Canada but because those companies have operations, well Placer is now buried for the most part, but had a fair bit of exposure to Nevada. And with those companies, essentially, you get trained to look for multi-million ounce deposits because that's what the big guys want. And so that's something that I see at Pamlico is that sort of potential.
And when I joined the junior sector in late 90s, in 2003, 2004, I co-founded Great Panther, which back in those days, we started as Great Panther resources, then Great Panther Silver, and is now Great Panther Mining. But it's a mid tier precious metals producer with mines in Mexico, Brazil and another one in development in Peru. So essentially, built that company over the course of 13 years. And so between Bob and I, we've got a lot of experience making discoveries, building companies. And so, I think we certainly have the ability to advance a project like Pamlico, which we both see a huge amount of potential there. So that's essentially what we're trying to do.
I should add actually, sorry, just in terms of the technical team, we recently brought a director on, by the name of Colin Jones and Colin lives in Auckland, New Zealand, but he's a geologist also. And his claim to fame, so to speak, is that he was the lead geologist or lead investigator of the team working for Freeport McMoRan back in around 1997, I guess it was, that basically investigated and uncovered the Bre-X scandal. And so Colin was part of that, so he's a highly respected geologist and he really brings a lot of depth to the team as well and to the board in general.
Goldfinger: That's some excellent background on the team. So Newrange, the stock chart, is breaking out of a multi-year base now. Basically, NRG has been trading sideways since early 2018 and you guys are finally breaking above this 20 cent area this morning. What does that mean for the company in terms of warrants being driven in and potential to do more financings to expand the drill program?
Robert Archer: Yeah, it's huge actually. Well, no 2018 and 19 were pretty brutal for the junior mining industry and we didn't want to do successive cheap dilutive financings, so we only did what we had to do in order to maintain the property and do the basics in terms of exploration there. Now largely because of the monetization of the Colombian projects, we were able to bring some cash in. And then with the rising gold price, it's allowing us to get back drilling again and we did do a bit of financing last December, raised a million and a half, and that's allowed us to kick things off.
And so now, we'll be well-funded. I'm hoping that if we can balance the incoming funds that I mentioned from the sale of the GOLD.TO shares plus exercising warrants, that we won't have to go back to market this year. But having said that, if we do have good success at Pamlico and perhaps even at the North Birch project, then that might give us an opportunity to finance at much better prices and really sort of cash up and be a bit more aggressive in advancing the project.
Goldfinger: But right now, you're fully funded for what you're planning to do?
Robert Archer: Yes.
Goldfinger: So obviously with success and good market conditions, you could expand upon that because Pamlico is a year round project, right?
Robert Archer: Absolutely. It is, yes, that's correct. And as I say, if we have good success, then there's no reason why we can't just keep on drilling and even add additional drills if that's warranted. For example, if we have good success with these deeper holes on the IP anomaly, as it sits right now, that anomaly is about a kilometer long North to South and hard to tell on the width, but several hundred meters likely. And if that does prove to be mineralized, then it really opens up the potential of the project quite considerably. So, that's obviously what we're hoping for, but the drill will ultimately tell the tale.
Goldfinger: And tell us about your Ontario project, North Birch. I know you guys were planning to do some field work there this summer.
Robert Archer: Everything is still on a temporary hold because of the COVID restrictions. And mainly as it pertains to the first nations up there, most of them are fairly remote communities and there's been a lot of concerns that if the virus was to get into those communities, it could be quite devastating. So they've had to really put a lot of precautions in place and restrict travel in and out of the communities and around the area and so on.
And so that's put a bit of an administrative burden on the leaders of those communities, which has meant that they haven't had much time to deal with the applications for exploration permits from various mining companies. And so, because of that, they have actually asked the government to put a temporary hold on granting any of those permits until such time as they can sort of get back to reviewing those.
And so everything has been on a temporary hold for a while up until now, and not sure exactly when that could be released, but the good thing is that we are starting now, we've got a scheduled call this week with one of the first nations communities to have a consultation call with the chief of that local band. And if there are no concerns on their part, then we go through that process with each of the communities that's affected. And then if they sign off, then the government grants the permits and off we go. So I guess, it's possible that we still might be in there before the end of July. I'm thinking more along the lines of August.
So we could get a couple months of field work done up there, which would be mostly mapping, prospecting, sampling, sort of thing. And then trying to get ready for a drill program, which would likely then take place during the winter when everything's frozen up there and it's actually a lot easier to get around. So, that's generally how things are looking. And the project as I recall, is modeled after the Musselwhite mine, which is about 190 kilometers farther North in Ontario. And that's an iron formation hosted gold deposit and the iron formation as the name suggests, is a very iron rich rock that shows up very well on airborne magnetics. And so we see the same sort of geophysical signature, magnetic signature, as that Musselwhite Mine. And I worked on the pre-feasibility study up there back in the mid nineties with Placer Dome, and that's about an eight million ounce deposit and still in productions after 23 years.
So, these types of deposits can be quite significant and we're excited about getting in there and testing this one too. So it's somewhat conceptual, but at the same time, it's the sort of thing that if we do hit, then it's got lots of upside at very little cost.
Goldfinger: So, going back to the Pamlico, a couple of questions. How much does it cost you per meter to drill at Pamlico and with the big deep IP anomaly, when approximately will you start to drill the first hole there?
Robert Archer: In terms of costs, we're looking at around US$60-US$70 per meter. In terms of timing, gosh, I'd say for those deeper holes, we're probably looking at, I'd say towards end of July, maybe even into August. We'll be drilling along Pamlico Ridge and testing some of these other targets, such as the pediment zone and so on and testing the ones a little bit closer to surface, and just making sure that we have a good handle on these things, because obviously drilling those deeper holes is much more costly.
And so you want to make sure that the holes are properly located and that you actually do drill in the right direction and drill deep enough to intersect the target because you need to drill a hole and then stop short of it or something.
Goldfinger: Is there anything else that you'd like to add? Is there anything else you think is important for investors to know about Newrange Gold?
Robert Archer: I think we've covered most of the salient points. I think people know by now that the infrastructure on Pamlico is excellent, it's between Reno and Las Vegas, just outside of the town of Hawthorne, we have a power line that crosses the property. Metallurgy is great from the preliminary studies that we've done. So it's got a lot of things going for it. And mineralization is close to surface, it's leechable. So it's a sort of project that once it gets to the right size, the right stage, it could probably be brought into production fairly quickly and at very low cost, but that'll hopefully be for someone else to determine.
Goldfinger: Thank you for your time this morning Bob. I am very optimistic for the summer drilling at Pamlico and i’m glad the market has finally begun to take note of Newrange. With some drilling success and continued bull market tailwinds I believe new all-time high share prices are attainable for NRG.
Disclosure: The author of this article has been compensated for marketing services by Newrange Gold Corp. The author is long NRG.V shares at the time of publishing and may choose to buy or sell at any time without notice.
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