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Van Nieuwenhuyse eyes “Donlin 2.0 but in a better jurisdiction”
VANCOUVER, CANADA — Donlin in SW Alaska is a freak of nature gold deposit (39Moz at 2.2 g/t), jointly owned by Barrick Gold and Novagold.
Novagold fought-off a takeover offer from Barrick in 2006 when Novagold’s shares soared past $19. Donlin remains undeveloped today, but its staggering size, grade and potential production profile (1.1M oz/yr) make it one of the gold industry’s most significant projects.
Novagold founder Rick Van Niewenhuyse, an exploration geologist and mining entrepreneur based in Vancouver, left the CEO position in 2012 and remains a Director. He is currently CEO at Trilogy Metals $TMQ, a copper, zinc and precious metals explorer in Alaska profiled on CEO.CA last week. Link: @tommy/novacopper-is-now-trilogy-metals
Trilogy’s predecessor Novacopper was a CEO.CA sponsor last year, and I was having lunch with Van Niewenhuyse a few months ago to catch up. He quietly told me he was working on acquiring “Donlin 2.0 but in a better jurisdiction”. I pressed him for details but he hadn’t secured the project yet and kept his mouth shut.
Tonight SolidusGold $SDC, a publicly traded shell company led by Van Nieuwenhuyse (Chairman, Interim CEO, Director), announced the acquisition of the Northumberland project from Newmont for US $20 million and plans to raise C$40 million (35 cent Units) through Haywood Securities.
After reading the news release on my CEO.CA app, I phoned Rick, who is at the Precious Metals Summit in Beaver Creek, Colorado and was on his way to dinner when I called. He confirmed Northumberland is the “Donlin 2.0” project we spoke of a few months ago.
I am new to the Project and haven’t done much homework. I also have a small share position in SDC which makes me biased. But, I take Rick’s bullishness seriously and wanted to spotlight what he’s doing for CEO.CA readers.
Northumberland is a historic producer in central Nevada that was previously developed by Fronteer Gold (Mark O’Dea). Fronteer (and predecessors) found over 3 million ounces of gold (at average grades of 1-4 g/t Au) there before being taken over by Newmont in 2011 for $2.3 billion. Newmont was after Fronteer’s Long Canyon project, and Northumberland has been dormant since.
At a pro-forma market cap of $57.4 million (with $14.5 million cash (pre transaction costs), Solidus is highly undervalued for what it already has compared to peer North American gold explorers, trading at $13 per ounce. See: http://cdn.ceo.ca/1btmmkd-SDC%20Developers.png+
Van Nieuwenhuyse thinks Solidus can double the existing resource through exploration, including over 600,000 ounces of oxides, which are potentially amenable to simple mining.
Doubling 3 million ounces doesn’t get you to Donlin’s 39 million, but the strength of the project, according to Rick, is the untested targets on the property. The majority of past exploration at Northumberland has been focused on just one target area, Rick said. He’s very excited by the exploration opportunity at Northumberland.
GF Capital and “certain strategic investors” have committed to purchasing $20 million of the $40 million financing (35 cent subscription receipts). Haywood Securities has been engaged to raise the money.
SolidusGold has 49.4 million shares out and last traded at 35 cents when it was halted Thursday.
The company will host a conference call on September 22, 2016, at 8:00 a.m. Pacific Time/11:00 a.m. EST.
Read the news release: @marketwired/solidusgold-to-acquire-northumberland-project-from-newmont-for-us20-million
Here is a link to the company’s new corporate presentation: http://www.solidusau.com/assets/docs/ppt/SolidusGold_Corporate_Presentation_Sept-2016.pdf
Disclaimer: I am biased. This post was written quickly and may contain errors. Always do your own due diligence and consult a licensed investment advisor prior to making investment decisions. Go to www.solidusau.com and SEDAR for more information.
@SamsonWell, I admit I was the fool who paid up 72 cents (intra day high) for some shares today. I still think it was a cheap price, assuming the deal will get closed....
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@turnpiker$SDC Would be most interested to learn any metallurgical issues associated with the Northumberland Project.
From the Solidusgold 9/15/2016 NR:
The historical resource estimate showing the gold oz distribution:
Out of a total of (2,259,000 + 776,300) 3,035,300 oz of gold
Indicated Open Pit Oxide 538,000oz
Inferred Open Pit Oxide 1,300oz
Open Pit Oxide represents some 17.8%; the remaining are sulphide & underground - representing some 82.2%.
The NR mentioned “Two cut-off grades are used for sulfide material, which will likely require oxidation prior to cyanide leaching. The sulfide material is identified by cyanide extraction ratios less than 50%.”
(No reference of any metallurgy done in the 2008 Fronteer Development Technical Report, Northumberland Project: Resource Update)
@tommyRick likes a rifle shot approach to exploration, rather than acquiring a bunch of projects. $SDC's Northumberland project was last developed by Fronteer (acquired by Newmont). Solidus is paying $20 million US to acquire Northumberland. Its 2008 resource estimate showed more than half a million oxide ounces. Twice the grade of others being developed in Nevada. Plan is to grow oxides to 1 million plus ounces. 1.7 million ounce sulphide resource - not stellar grades, refractory ore. In 2011, analysts were valuing Northumberland's NAV between $150-300 mil US. #SubscriberSummit
@tommyPermitting a lot easier on private land - advantage for $SDC. Immediate exploration upside also on private land. Drilling targeted for Feb or March 2017. Would like to drill 12,000 meters. #SubscriberSummit
@rackerSolidusGold $SDC has not been able to raise the US $20 mill necessary to acquire the Northumberland project in Nevada from Newmont, citing a weakening gold market. The company has appointed Soren Posescu CEO, replacing interim CEO Rick Van Niewenhuyse, who will stay on as chairman. SolidusGold is working with Newmont on an extension. @marketwired/solidusgold-inc-provides-transaction-update