It is often said in the exploration business that the best place to look for gold is in the vicinity of existing mines, preferably large ones.
NuLegacy Gold Corp. (
TSX: V.NUG,
Stock Forum), which released new drill results Thursday (see details below), is hoping that the old theory will apply once again at its Iceberg gold project, which is located near a handful of big mines in Nevada’s Cortez gold trend, one of the world’s most prolific regions for precious metals exploration.
Two of those mines – Cortez Hills and Pipeline – are controlled by
Barrick Gold Corp. (
TSX: T.ABX,
Stock Forum), the Canadian company which is also developing another large gold project, known as the Goldrush, near Nu Legacy’s Iceberg project.
“Goldrush is Barrick’s most important development project anywhere on the planet,’’ Nu Legacy Chief Executive Officer James Anderson told Stockhouse during an interview in Vancouver.
He was referring to a Barrick estimate, which says measured and indicated resources at Goldrush now stand at 10.6 million ounces, with a further 4.9 million ounces in the inferred category.
Goldrush sits directly adjacent to the 60 square kilometre Iceberg Project, where Nu Legacy has the option to earn a 70% interest in the project from Barrick by spending $5 million.
“We have spent $4 million so far and we expect to complete the earn in before the end of this year,’’ Anderson said.
At that point, Barrick would have 90 days decide whether to remain a joint venture partner with a 30% minority interest or to spend the $15 million that would be required over five years to back in for a 70% working interest, leaving Nu Legacy with a 30% carried to production interest.
Nu Legacy has yet to establish a NI 43-101 compliant gold resource at Iceberg.
However, since optioning the project from Barrick in December 2010, the junior has discovered two near-surface zones of oxide gold mineralization that are 200 to 250 metres wide, 25 metres to 70 metres think, with gold grades ranging from 0.5 grams per tonne to 5.6 grams.
Prior to the announcement of new results this week, the company said the compilation of 149 historic drill holes and 38 NuLegacy holes indicates the potential for a large tonnage Carlin-type gold deposit that offers a potential exploration target of 90 to 110 million tonnes, grading 0.9 grams and 1.1 grams per tonne of gold.
On Thursday, Nu Legacy shares jumped 8% to 14 cents after the company released a new batch of results from the project, including high grade gold intersections.
The results are from six of the 24 holes that the company plans to complete this year to in order to exercise the earn-in option, spending US$1.3 million in the process.
Highlights include Hole RHB-040, which materially expanded the higher grade gold mineralization in the North Zone area. It intersected two gold-bearing horizons, one with a significantly high assay result of 25.2 grams of gold per tonne over 4.6 metres within a 41.2-metre section of 3.9 grams that may represent the high grade horizon that the company has been targeting.
The important aspect of these results are confirmation that the Iceberg deposit hosts the classic Carlin-type very high grade gold mineralization and has significant quantities of gold in three gold-bearing stratigraphic horizons that are all within 200 metres of surface,
/www.stockhouse.com/news/press-releases/2015/05/07/nulegacy-reports-high-grade-iceberg-drilling-results">the company said in a news release.
Nu Legacy said the 2015 program will consist of approximately 5,300 metres of drilling through the end of August 2015.
The next set of six holes are being completed and assays are expected in early June.
Thursday’s early morning rally leaves NuLegacy with a market cap of $19.8 million, based on 141.5 million shares outstanding. The 52-week range is 17.5 cents and 6 cents.
“We currently have $1.7 million in cash and marketable securities,’’ Anderson said. “We will be raising some money,’’ he said, adding that the targeted amount will likely be in the $1.5 million to $2 million range.