Post by
JackieMac on May 28, 2020 11:13am
Nevada Exploration Inc.: A Chronicle of Failure
When gold exploration companies approach the market for financing, they present wonderful stories to sell. Some have recycled the same story for years at different projects, but the product has always been the same. Having raised $2.58 million in three private placements to fund its last South Grass Valley RC-drilling program, Nevada Exploration announced yesterday that the result of its work was “to cost-effectively increase its data coverage at the project, and thus its confidence in its geologic model, …” (1) This “exciting new” project, which NGE has held since 2012, has yet to yield any gold over any thickness in any hole the company has bored. Despite the company’s attempts to burnish its latest campaign, some fully expected such results. This anticipation was not gleaned from any special knowledge or skills, but rather from a reckoning of NGE’s previous campaigns. Watchers of the South Grass Valley Project have noticed it fits snugly with the pattern of similarities observed with NGE. Market and other circumstances have altered the veneer periodically, but NGE’s application of the methodology it so promotes has resulted in nothing short of abject failure. As the following demonstrates, NGE’s declarations of cost effectiveness, targeting abilities and technological advantages are false.
The premise behind Nevada Exploration's efforts is that the results of its groundwater chemistry program "have demonstrated that Nevada's gold deposits exhibit recognizable groundwater chemistry." (2) By "acquiring additional properties with gold in water anomalies similar to known gold mines previously identified using the NGE’s proprietary water sampling techniques," (3) the company will "spread exploration risk over many targets that all have highly anomalous gold in water chemistry similar to known gold mines." (4) CEO Wade Hodges claimed NGE has "a considerable competitive advantage over other groups relying on conventional exploration methods to reduce Nevada’s 100,000 square kilometers of covered basins into discrete exploration targets." (5) The value generated by NGE is reputedly from its ability to map "a scent that can be picked up and followed back to its bedrock source in much less time and for much less money than is possible by using conventional exploration techniques alone." (6)
Commencing public trading in 2007, NGE launched an ambitious drilling program of 80 RC holes on ten properties. (7) Fletcher Junction, the first project to be drilled, returned only anomalous gold values. Despite this, NGE headlined the discovery of "a new gold-bearing, hydrothermal system." Comparisons with the Aurora Mine flowed and a new 36-hole RC drill program was announced. (8) Reports from Fletcher Junction established a pattern for subsequent projects. Initial drill results with no more than anomalous gold showings are presented as "a complete demonstration of the validity of our innovative exploration concept," along with comparisons to a local mine. (9)
NGE's claims at Fletcher Junction covered an entire basalt cap and its land package had nowhere to grow. Bull Creek, "another previously unknown hydrothermal system", compared to the Sleeper Mine, (10) had no such geological boundary, and NGE's actions at this project would be typical of those to come. Having originally staked the project based on groundwater reconnaissance, NGE conducted a detailed hydrogeochemical and soil survey at Bull Creek, the results of which prompted the company nearly to double its position to more than 4,000 hectares. (11) Following a fruitless drilling campaign, the company announced that the target was entirely outside its original claims, and, after having reduced its claim area, added an additional 800 hectares to envelop the "developing" target. (12)
NGE's claim counts have waxed and waned depending on exploration results and market conditions. The company's methodology has required a predictable cycle of adding and relinquishing claims. Instead of defining specific targets, the hydrogeochemistry employed by NGE defines large areas and requires constant claim management. The costs associated with NGE's claim holdings cannot be ignored. For perspective, from 2006 to the last reporting period, (13) NGE's cash land costs amounted to $5.41 million, while its drilling costs, including work by the Scorpion Rig, summed $5.57 million. (The inclusion of $621,560 worth of Scorpion Rig drilling is generous since the equipment is incapable of penetrating bedrock.) Additionally, NGE issued 950,000 shares related to property. The vast majority of NGE's land costs derive from BLM claims fees, from the company's staking activities demanded by its methodology. The necessity for expansive and dynamic land packets contradicts NGE's assertion of having a "considerable competitive advantage" in locating a gold "source in much less time and for much less money than is possible by using conventional exploration techniques alone."
NGE's pattern of claim management is further illustrated by its works at other early projects, including Awakening and Hot Pot. The Awakening project, another Sleeper Mine analogy, first expanded when "results of the detailed water survey have increased both the magnitude and the extent of the area." (14) After resurrecting Awakening some years later following an abandoned drill program, and after having reduced its parcel size, NGE decided, as it did at Bull Creek, that its target was never fully enveloped by its claims. The parcel was subsequently increased by 35-percent. (15) Tortuously analogous with the nearby Marigold and Lone Tree deposits, (16) Hot Pot was the nucleus of the current Kelly Creek project, a vast 5320-hectare packet complicated by checkerboard railway lands and wealthy neighbors who can afford to wait for NGE to drill the basin in their stead. (17) When as much or more resources are burned staking and holding as are spent drilling, the methodology must be able to bear fruit.
The large areas identified by hydrogeochemistry and claimed by NGE did not lend themselves to many specific targets. The weak "scent" is apparent in the company's early drill campaigns. At Fletcher Junction, thirteen holes were spaced at an average of 500 meters apart (18); at Bull Creek, eighteen holes ranged between 300 and 1,600 meters apart (19); at Awakening, an aborted campaign of five holes (20), "high priority targets" were spread over 1,350 hectares (21); and, at Hot Pot, initial drilling consisted of nine holes with an 800-meter nominal spacing, (22) while the second phase consisted of ten holes with a 100-meter spacing. (23) These intervals, while common for initial greenfield drill programs, did little to demonstrate that NGE can locate gold "in much less time and for much less money."
NGE was not exempt from the September, 2008, crash. By the following February, the company was broke and its ambitious 80-hole, 10-property solo program was over. (24) Despite its inability to intercept any gold greater than anomalous, potential suitors were convinced enough to take a chance on NGE's interpretations. Hot Pot, (25) Awakening (26) and Fletcher Junction (27) were joint-ventured to Enexco, Northgate (later AuRico) and Spruce Ridge, respectively, and were subject to core drilling.
None of the 6,850 meters of core drilled by three partners contained any gold greater than "anomalous," and all dropped their interest in NGE projects. At Hot Pot, Enexco hired economic geologist Doug McGibbon of Marigold and Pinson fame to review cores and data. (28) After eleven cores, Enexco gave up chasing anomalies. Its CEO commented, "we reached a point where it is more worthwhile to Enexco to concentrate our attention and resources" elsewhere. (29) AuRico, on acquiring Northgate, promptly dropped Awakening, noting "drilling results were not encouraging enough." (30) Spruce Ridge, upon relinquishing the Fletcher Junction option, provided some revealing comments: "The results do not lead to a simple vector indicating which direction to go towards the gold source; following up on these indications would have entailed a multi-hole core drilling program, with each hole approximately 2,000 feet deep." (31) Spruce Ridge concluded that it "would have a better chance of generating economically significant results, for a small fraction of the budget" elsewhere. (32)
Clearly, operations conducted by NGE and its partners at Hot Pot, Awakening, and Fletcher Junction had failed to demonstrate NGE's contention that increased concentrations of gold in groundwater indicate gold in bedrock that is "relatively nearby", "relatively shallow," and "relatively large". (33) Volcanic-hosted systems like Bull Creek, which NGE described as "less marketable, than the larger Carlin-type sedimentary-hosted systems found further to the east," (34) and later Fletcher Junction, (35) were dropped. All that remains of NGE's Sleeper-type projects is six claims at Awakening. (36)
It is interesting to observe during NGE's joint venture period the development of the company's boilerplate business description. No longer did NGE claim the ability to locate economic gold deposits for "much less time and for much less money," or for a "relatively small investment." (37) This language disappeared and anthropomorphic terms such as "scent", "memory," and "fingerprint," were utilized much more sparingly. Based on hard results, NGE could no longer credibly maintain its assertions and resorted to conventional, bland and hackneyed constructs such as, "create shareholder value by leveraging its properties and technology." (38)
By 2014, Nevada Exploration was broke again, abandoned by partners, and sliding to oblivion. Surviving through a series of private placements, shares for debt settlements and bridge loans, the company was in the same position as many who had over-extended themselves during the boom times. Instead of falling into obscurity like many of its peers did during that time, the carcass of Nevada Exploration caught the attention of some miners of a different sort, Dennis and Darcy Higgs, whose families became the largest holders of NGE. (39) Immediately prior to its reorganization, per calculations derived from SEDI filings, the company’s three continuous officers owned 16.4 percent of NGE shares. At the time of this writing, those three officers control only 4.3 percent of outstanding shares. A one-for-ten consolidation, an element of the reorganization, destroyed the officers’ stake, while the subsequent $0.05 private placement opened the door for the Higgs brothers.
Apart from the brand ownership, the greatest difference since the Higgs’ arrival has been noted in NGE’s marketing. Dennis Higgs, in a letter to shareholders, indicated that the company would commit “a larger part of its finances on this agenda.” (40) NVDEF began trading on the OTCQX in the United States, (41) and Nevada Exploration embarked on a publicity campaign which involved some agencies who produced material bordering on sensationalism. A host of analysts have covered NGE since, but none have had the effect as did Future Money Trends’ initial contract. (42) Under FMT’s watch, shares of NGE reached their highest post-consolidation level to date, with promotions timed to coincide with NGE press releases. Brazenly, NGE’s new owners, the Higgs brothers, dumped shares on the public market at the highs of the FMT pumps, (43) leaving the newly introduced retail investors with a costly bag. CEO Hodges’ last public trades, as indicated by SEDI, were sales during an FMT promotion. A review of NGE’s SEDI filings for the period reads like a day-trading account. NGE’s new backers seemed more interested in mining the stock market than in mining gold.
To complement the external promotion, NGE began composing lengthy news releases surpassing anything it had produced before. No less than eleven news releases exceeding 2,000 words, with some approaching 4,000, have been issued by the company since 2016. (44) NGE’s characterizations eventually prompted IIROC to action. The regulators requested the company clarify its statements regarding production numbers of comparison mines, the purported five-to-ten-million gold ounce target at Kelly Creek, and NGE’s management claim of having discovered 30-million gold ounces in Nevada. The Kelly Creek target was explained away as “conceptual in nature”, while the 30-million ounce discovery attribution was retracted “due to uncertainty associated with characterizing each of the historic resources.” (45)
Inside its wordy pitches, the company deployed a new vocabulary word, "vector." From 2006 to 2016, the word appeared four times in NGE news releases, twice to relay Spruce Ridge's reasons for abandoning Fletcher. Since 2017, "vector," or its gerund, has appeared 27 times in Nevada Exploration news releases. The company’s chronic use of the verb is meant to imply that exploration success is at hand, with only a few more drill-holes needed to secure the prize, along with a few more millions of dollars and shares.
The new enterprise reinforced its exploration arsenal with two new tools for the Kelly Creek project, both of which have been present since. The first was “the latest in 3D modelling software” and an “updated 3D geologic model.” (46) The new model was cited as justification to increase the parcel size by more than 1,250 hectares in 2016, and also played a role in the resurrection of the yet undemonstrated claim that hydrogeochemistry is a “cost effective tool” for gold exploration in covered settings. (47) “The Model” has become almost an overarching feature of NGE’s delivery, not because of any demonstrated functionality, but because it attempts to suggest that many kilometers of barren drilling has returned something of value. The more NGE fails with the drill bit, the more it elevates “The Model.”
The second tool was the Scorpion Rig, a small-diameter RC drill mounted on a light truck platform designed to collect groundwater, overburden and top-of-bedrock samples “for a fraction of the cost of using conventional drilling equipment.” (48) NGE hailed the roll-out as a “game changer for Nevada.” The company’s claim that it had “reduced its all-in drilling costs (including geology and analytical) with its Scorpion Drill Rig down to approximately $125US/metre” was misleading. (49) The fact that NGE had been using full-sized conventional RC equipment to obtain groundwater and overburden samples demonstrates that its costs for this task were excessive already. NGE had been overpaying for drilling capacity far in excess of its needs and, as will be shown, the Scorpion Rig did not live up to its billing.
Like at its previous projects, NGE increased significantly its land package at Kelly Creek based on hydrogeochemistry, assisted by the 3D model, first by 550 hectares (50) and then by 712 hectares a month later, bringing the total area to 3,822 hectares. (51) The campaign started well with assay reports of 0.15 grams per ton gold found on shallow bedrock. CEO Hodges claimed, “These early results at Kelly Creek demonstrate the validity of our systematic and integrated exploration program." (52) After drilling 36 Scorpion holes and "vectoring using gold and related geochemistry in the groundwater," the company increased its parcel size by another 500 hectares. (53) Apart from "encountering significant enriched gold at the bedrock-alluvium contact," the assays were barren over any thickness for the 50 to 100 meters spaced holes along fences 150 to 1,000 meters apart. (54)
Apparently, NGE’s isolated discovery of 0.15 gold grams per tonne over no thickness was sufficient justification to announce that, as at Fletcher Junction and Bull Creek, the company had found another "gold-bearing hydrothermal system," with similarities drawn between Lone Tree and Marigold. (55) NGE added another 1,090 hectares to its holdings at Kelly Creek, "making it the third-largest holder in this important covered search space ..., after Newmont Mining and Barrick Gold." (56) Despite owning 100-percent of its claims at Kelly Creek, the project is complicated by checkerboard ownership, a remnant of the railroad land grants. Any notable discovery by NGE at Kelly Creek would be diluted effectively at a project level due to the adjacent alternating Newmont claims. Kelly Creek represents a tiny portion of Nevada Gold Mines’ holdings. The NGM joint venture has no priority to explore the Kelly Creek Basin at the moment and would gladly encourage a junior explorer like NGE to evaluate the district at no cost to NGM. Nevada Exploration desired a district-scale project all to itself, and Kelly Creek was shelved in favor of the Grass Valley boondoggles.
Nevada Exploration's involvement with the Grass Valley projects began after being contracted by US Gold, later McEwen Mining, to conduct a hydrogeochemical survey of lands surrounding the Gold Bar and Tonkin properties. (57) The initial contract developed into a two-year exploration agreement in which NGE would use its hydrogeochemical techniques to generate new projects (58), and Grass Valley was elected as a designated property through the agreement. (59) Based on hydrogeochemical anomalies, NGE delineated a 1,280-hectare target and offered "confirmation that the Grass Valley Project represents a compelling new exploration target." (60) McEwen took a gamble on hydrogeochemistry and commenced core drilling at Grass Valley, south of Barrick's Cortez Hills. (61)
With no gold reported from its 811-meter core, McEwen abandoned its agreement with NGE. Not deterred, NGE revealed that it had access to core cuttings from a geothermal explorer which, CEO Hodges added, "will add considerably to our ability to vector the geology and geochemistry at the Property." (62) After analyzing assays from the geothermal cores, NGE declared that it had confirmed "the presence of a large, gold-bearing hydrothermal system" which represented "one of the most important new exploration projects in Nevada." (63) In classic NGE fashion, after no gold showings, the company more than doubled its “increasingly important” Grass Valley parcel to 3,440 hectares. (64) Grass Valley was so important that, except for holding and travel costs, no work has been recorded at the project since 2016. The company stated upon closing a 2019 private placement that it planned exploration at Grass Valley and Kelly Creek, (65) but none since has been reported.
It is illustrating to chart the evolution of the Grass Valley “target” dimensions in the context of NGE’s purported “vectoring” abilities. First reported as eight kilometers long by 1.6 km wide in 2013, (66) the company increased the target to sixteen kilometers long by three kilometers wide by 2015 (67), and slightly reduced it to 14.5 kilometers by 2.4 kilometers wide the following year. (68) Inexplicably, in its 2019 Third Quarter MD&A, NGE described the Grass Valley target as being sixteen kilometers long by five kilometers wide. (69) CEO Hodges comments on vectoring at the project (70) are not convincing given that the Grass Valley “target” has ranged from 1,280 hectares, to 4,800, to 3,480, and, without explanation, to 8,000 hectares over the course of six years.
While conducting hydrogeochemical surveys in Grass Valley, NGE delineated 1,500 hectares in new claims at what was to become South Grass Valley, “a compelling new exploration target.” (71) Little work was performed at the project until the Higgs brothers arrived and the company restructured, when the parcel was increased to 2,210 hectares at “one of the most exciting new gold exploration projects in Nevada.” (72) After completing drilling at Kelly Creek and returning to Reno for maintenance, the Scorpion Rig was deployed at South Grass Valley to aid in mapping and evaluating bedrock, overburden and groundwater. CEO Hodges commented, “using our low-cost Scorpion drill rig to execute a systematic and science-based early-stage drilling program allows us to be very targeted in our use of more expensive conventional drilling, which we believe improves our odds of discovery.” (73)
Layers of coarse boulders impeded the Scorpion Rig’s progress at South Grass Valley, and NGE had to utilize its Geoprobe equipment to complete the survey, penetrating less than half the depth of the Scorpion Rig. (74) It is possible that the company overworked the Scorpion Rig. Prior to its roll-out, NGE listed its drilling capacity “to 400-plus feet,” (75) but, while detailing its South Grass Valley drill plan, the company stated that the Scorpion Rig would bore “to depths of 150m (500ft).” (76) Not all was well with Nevada’s “game changer,” as the company eventually had to consult “industry experts to complete modifications to the Scorpion drill rig to improve its capabilities.” (77)
Despite the limitations of the Scorpion Rig, the company defined a 1,000 by 4,000 meter zone of enriched gold and pathfinders in groundwater, on which CEO Hodges remarked, “We have constrained this large prospective area to a focused and compelling target that is now ready for a deeper drilling program.” (78) The company presented an air magnetic survey as “another important cross-hair” for deeper drilling (79) and inevitable comparisons with Barrick’s Cortez Hills deposit were suggested. (“Cortez” appears 137 times in NGE press releases.) CEO Hodges remarked, “by vectoring with gold in groundwater, our detailed hydrogeochemistry borehole program has brought us close to the source.” (80) The maiden core-drilling plan at South Grass Valley featured three fences 1200 m apart, with two holes on each 400m apart “to discover a large CTGD footprint.” (81)
In a similar fashion to its announcements at Fletcher Junction, Bull Creek, Kelly Creek and Grass Valley, the company headlined its discovery of a "Hydrothermal System," this time a “Large Carlin-style” system. NGE increased its holdings to 4,500 hectares and announced the “next phase of drilling to vector towards potential mineralization.” Speaking of large Carlin-type systems, CEO Hodges boasted, “we are proving that we have the technology and experience to lead the industry in finding them under cover here in Nevada.” (82) It is not clear what experience CEO Hodges was referring to as far as NGE’s record of locating any gold over any thickness in any drill hole the company has ever sunk in Nevada, let alone an economic gold deposit.
The ever-inflating targets defined by NGE at its Grass Valley projects were again demonstrated when NGE increased its target strike from 2,500 to 4,000 meters on account of a mercury soil sampling suggested by its hydrogeochemistry studies. (83) That figure was rolled back to “at least 3,000” meters the following month (84), and then, during the second phase of core drilling, expanded to “at least 3,500” meters but “with a likely width of more than 1,000” meters. (85)
NGE’s second phase of drilling at South Grass Valley was intended to reduce its project “into smaller discrete targets” and to use “its updated geologic model to continue to vector towards structural zones associated with the highest concentrations of CTGD pathfinders and gold.” In addition, the company planned “to identify additional high-priority targets by stepping out and extending its data coverage.” (86) Rather than “vectoring” toward mineralization, the company elected first to proceed with step-out core drilling, claiming, “its field personnel are focused on supporting the core drilling program.” (87)
Conditions did not prove favorable for NGE, as its first two holes were terminated due to fractured bedrock. NGE’s target reduction program amounted to no more than soil tests and groundwater sampling with the Geoprobe, the company having abandoned the Scorpion Rig, citing speed considerations. (88)
“[D]rilling to vector towards potential mineralization” would have to wait. Eventually the diamond bit broke through the breccia and NGE recovered a full core. With all its new data plugged in to the 3D model, NGE prepared to “zoom in” and introduced a suite of four new targets, “prioritized directly on the presence of gold and CTGD pathfinders.” Waterfall was described as “immediately upstream from the highest gold in groundwater seen at the Project;” Freddie was coincident with “anomalous gold in groundwater, as well as the largest and highest mercury-in-soils anomaly at the Project;” Water Canyon was “supported by anomalous CTGD pathfinders in groundwater as well as anomalous mercury in soils;” and Golden Gorge contained “anomalous mercury in soils within the N-S zone of enriched gold in groundwater.” To enhance the “exciting” project, NGE staked an additional 1,200 hectares. (89)
As assays were released the excitement began to wear off. Of the first three holes at the Freddie target, near Goodwin Butte, the focus of interminable NGE comparisons with Cortez Hills, only one reached target depth and it showed “a decrease in the total gold and pathfinder budgets.” At Golden Gorge, NGE encountered mostly granite and concluded that the intrusive margin is further to the east. With no more than “highly anomalous” pathfinder elements reported in its early assays, NGE provided a glimmer of hope by suggesting a new target, Golden Gorge East, and “growing evidence that the general direction of the mineralized hydrothermal fluid flow at the district is likely from the east, which supports the presence of a district-scale structure.” (90) This was not new information, however, as NGE suggested “a potential source direction for the hydrothermal fluids in these areas of the Project as coming from the east, at depth,” following its core drilling program at South Grass Valley almost a year prior. (91)
The “Hail Mary” attempt at East Golden Gorge aside, NGE pulled the plug on its RC program, with CEO Hodges noting, the “rig is not reliably completing holes down to the depths needed to test our targets.” For all the fanfare and excitement generated by the company, all it achieved as a result of its RC program at South Grass Valley was “improved resolution” of it geologic model. For all its purported “vectoring” abilities and “low-cost drilling technology”, NGE announced that it was “transitioning back to core drilling, in order to more confidently reach the depths needed to test what we believe have become even more compelling targets.” (92)
With only “increased data coverage” to show for its last “cost effective” $2.58-million “vector towards potential mineralization,” Nevada Exploration has once again gone full circle and will return to market, hat in hand, with an even more bloated share structure for a company of its stage, to plead its case for continued exploration. Like before, warrant clippers will dominate the placements while hapless retailers buy their shares after escrow. The company will benefit by gold-price appreciation, not from any resource it has defined, but from application of its marketing.
Implicit in NGE’s marketing is the notion that the company is better equipped to find undercover deposits in Nevada than its competitors, and that its techniques are cost-effective, despite having found no gold to speak of. A digest of how some mines in Nevada were located under alluvium casts some doubt on NGE’s claims. The Sleeper Mine, long a comparison vehicle for NGE’s Bull Creek and Awakening projects, was discovered from observation of iron oxide stains in a nearby scarp, followed by analysis of altered volcanic rocks exposed on a pediment. The project was proved through 3,536 meters of core and RC drilling, and the mine began milling ore in 1986, only four years after the original observation. (93) Marigold and Lone Tree, the models for Kelly Creek, both were located by drilling based on range projections, while Cortez Hills, NGE’s namedrop for the Grass Valley projects, was discovered by a combination of old drill data, geophysics and range geology projections. (94)
Perhaps the closest discovery to what NGE is attempting to emulate in Nevada is that of Long Canyon. This deposit was initially detected from analysis of stream sediment, though not through hydrogeochemistry, but by way of Bulk Leach Extractable Gold (BLEG) technology. (95) The fundamental advantage of the BLEG process over NGE’s hydrogeochemistry is the relatively static nature of the samples compared to the dynamic properties of water. The industry has developed successful techniques for exploring covered valleys, while the self-proclaimed “leader” has yet to prove its own contention after thirteen years as a public company that its techniques are “cost effective”.
Since going public, NGE has raised $24.5 million from private placements and warrant exercises, issuing 164 million shares from these. While drilling is NGE’s “most expensive tool,” (96) it is not necessarily its greatest expense. As noted above, the company’s holding costs rival or exceed those of drilling (depending on how Scorpion drilling is categorized). In the same league, cash salaries distributed by the company approach both holding costs and drilling expenditures. (97) Without considering share compensation for services reimbursed to NGE’s management following voluntary pay cuts, (98) cash salary paid by NGE totaled $4.8 million from 2008 to its last reporting period. The company has issued more than 6.2 million shares for debt, mostly to related parties. Since the Higgs’ interest and consolidation, NGE has burned shares at almost twice the previous rate. From when it started trading publicly in 2007 to its roll-back in 2015, NGE issued shares at an average of 27thousand per day. Since then, the company has diluted shareholders at an average of 51 thousand shares issued per day.
The notion that NGE insiders are aligned with minority shareholders is suspect at best. The Higgs brothers’ first investment in the company was through a $0.05 financing. (99) Within less than a year, family members recouped their capital, as documented in SEDI filings, by selling furiously into the Future Money Trends promotions. Prior to NGE’s 2015 consolidation, CEO Hodges had acquired most of his shares from the company’s $0.001 seed financing. (100) From the seed financing to the roll back, CEO Hodges’ net transactions amounted to 642,000 shares at a $0.075. Immediately after the share consolidation, NGE’s management received compensation shares for back pay, roughly doubling each officer’s share counts. Since then, CEO Hodges’ net transactions amounted to 19,902 shares at a negative cost basis due to sales during the FMT pumps. This hardly reflects alignment.
Chasing the carrot of a “treasure map,” (101) a list of lands ready to be staked by NGE in the event of a discovery at one of the company’s projects, retail investors overlook the ownership and point to the “technology.” The technology amounts to a trifecta of a drill rig incapable of penetrating bedrock, a “Model” which is a repository of failed campaigns, and “new lab technology” (102) commercially available since 1999, equipment any modern analytical lab will employ. The fact that NGE advertises that it contracts an analytical lab which hosts a Thermo Fisher Element Series HR-ICP-MS is much like boasting in 2020 of a technological advantage in owning a mobile phone. Ubiquitous lab equipment does not constitute a technological advantage, but it remains part of the NGE narrative.
The narrative is all that has floated NGE, as few, if any, gold exploration companies have survived thirteen years on the public market without finding any gold over any thickness in any of the more than 30 kilometers of holes it has drilled. NGE’s narrative is compelling on the surface, as no other North American-based explorer emphasizes and exploits hydrogeochemistry as the key to sourcing gold in covered settings. But any research beyond the latest corporate presentation reveals a pattern of failure, masked by some vague “proof of concept,” with no demonstration of application whatsoever. The company has failed to offer any evidence of its core statements regarding cost effectiveness, targeting abilities or technology. Its owners have episodically treated shareholders as bag-holding tools while lining their own pockets on a risk-free ride. To describe NGE as a “lottery ticket” is an insult to lottery tickets. Lotteries are won every day, but the only winners when it comes to Nevada Exploration are those taking its shareholders’ money.
REFERENCES
(1) Nevada Exploration Inc., News Release, May 27, 2020.
(2) Nevada Exploration Inc., News Release, May 6, 2007.
(3) Nevada Exploration Inc., News Release, April 23, 2007.
(4) Nevada Exploration Inc., News Release, June 12, 2007
(5) Nevada Exploration Inc., News Release, October 4, 2010.
(6) Nevada Exploration Inc., Message from the President and CEO of Nevada Exploration Inc., November 30, 2007.
(7) Nevada Exploration Inc., News Release, April 23, 2007.
(8) Nevada Exploration Inc., News Release, June 23, 2008.
(9) Nevada Exploration Inc., Message from the President and CEO of Nevada Exploration Inc., November 30, 2007.
(10) Nevada Exploration Inc., News Release, February 23, 2009.
(11) Nevada Exploration Inc., News Release, June 27, 2008.
(12) Nevada Exploration Inc., News Release, June 15, 2009.
(13) The figures presented have been derived from Nevada Exploration Inc., Quarterly and Annual Statements, and Management Discussion and Analysis, from the Periods Ended December 31, 2006, and December 31, 2019. Restated figures have been used where applicable.
(14) Nevada Exploration Inc., News Release, August 18, 2008.
(15) Nevada Exploration Inc., News Release, March 3, 2014.
(16) Nevada Exploration Inc., News Release, April 2, 2009.
(17) Nevada Exploration Inc., Management Discussion and Analysis, Third Quarter Ended January 31, 2020, p. 3.
(18) Nevada Exploration Inc., News Release, June 23, 2008.
(19) Nevada Exploration Inc., News Release, August 18, 2008.
(20) Nevada Exploration Inc., News Release, April 2, 2009.
(21) Nevada Exploration Inc., News Release, August 18, 2008.
(22) Nevada Exploration Inc., News Release, July 14, 2008.
(23) Nevada Exploration Inc., News Release, April 2, 2009.
(24) Nevada Exploration Inc., News Release, February 23, 2009.
(25) Nevada Exploration Inc., News Release, June 8, 2009.
(26) Nevada Exploration Inc., News Release, April 14, 2010.
(27) Nevada Exploration Inc., News Release, May 7, 2012.
(28) International Enexco Limited, News Release, January 25, 2010.
(29) International Enexco Limited, News Release, August 16, 2011.
(30) Nevada Exploration Inc., News Release, January 6, 2012.
(31) Nevada Exploration Inc., News Release, September 30, 2013.
(32) Spruce Ridge Resources, Management Discussion and Analysis, First Quarter Ended July 31, 2013, p. 2.
(33) Nevada Exploration Inc., Management Discussion and Analysis, Second Quarter Ended April 30, 2008, p. 3.
(34) Nevada Exploration Inc., News Release, September 6, 2013.
(35) Nevada Exploration Inc., News Release, September 3, 2014.
(36) Nevada Exploration Inc., Management Discussion and Analysis, Third Quarter Ended January 31, 2020, p. 3.
(37) Nevada Exploration Inc., Management Discussion and Analysis, Year Ended April 30, 2010, p. 1.
(38) Nevada Exploration Inc., Management Discussion and Analysis, First Quarter Ended July 31, 2011, p. 1.
(39) Nevada Exploration Inc., News Release, August 21, 2015.
(40) Nevada Exploration Inc., Letter to Shareholders, January 16, 2016.
(41) Nevada Exploration Inc., News Release, December 15, 2015.
(42) Nevada Exploration Inc., News Release, October 19, 2015.
(43) NGE’s insider sales during this period can be verified at www.SEDI.ca ; the NGE-FMT “pump-and-dumps” were conducted in October, 2015, and May and August, 2016, as witnessed by the spike in share price subsequent to an FMT video promotion. NGE’s share price reached its highest post-consolidation level in September, 2016, after which it steadily declined in the absence of the FMT promotions.
(44) From 2006 to the end of 2015, the 103 news releases issued by NGE contained an average of 743 words, the longest of which was 1,861 (August 10, 2015). From the start of 2016, the 61 news releases issued by NGE contained an average of 1,452 words, the longest of which was 3,986 (May 16, 2019).
(45) Nevada Exploration Inc., News Release, January 19, 2018.
(46) Nevada Exploration Inc., News Release, May 2, 2016.
(47) Nevada Exploration Inc., News Release, June 6, 2016.
(48) Nevada Exploration Inc., News Release, June 6, 2016.
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(54) Nevada Exploration Inc., News Release, July 21, 2017.
(55) Nevada Exploration Inc., News Release, January 16, 2018.
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(57) Nevada Exploration Inc., News Release, June 6, 2011.
(58) Nevada Exploration Inc., News Release, February 27, 2012.
(59) Nevada Exploration Inc., News Release, September 24, 2012.
(60) Nevada Exploration Inc., News Release, August 12, 2013.
(61) Nevada Exploration Inc., News Release, January 27, 2014.
(62) Nevada Exploration Inc., News Release, July 31, 2014.
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(69) Nevada Exploration Inc., Management Discussion and Analysis, Third Quarter Ended January 31, 2019, p. 4.
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(71) Nevada Exploration Inc., News Release, November 18, 2013.
(72) Nevada Exploration Inc., News Release, August 24, 2016.
(73) Nevada Exploration Inc., News Release, September 20, 2017.
(74) Nevada Exploration Inc., News Release, January 22, 2018.
(75) Nevada Exploration Inc., News Release, June 6, 2016.
(76) Nevada Exploration Inc., News Release, October 19, 2017.
(77) Nevada Exploration Inc., News Release, May 16, 2019.
(78) Nevada Exploration Inc., News Release, March 15, 2018.
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(81) Nevada Exploration Inc., News Release, October 15, 2018.
(82) Nevada Exploration Inc., News Release, November 26, 2018.
(83) Nevada Exploration Inc., News Release, January 30, 2019.
(84) Nevada Exploration Inc., News Release, February, 2019.
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(90) Nevada Exploration Inc., News Release, March 2. 2020.
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(93) Nash, J.T., Utterback, W.C., and Trudel, W.C., Geology and geochemistry of Tertiary volcanic host rocks, Sleeper gold-silver deposit, Humboldt County, Nevada: U.S. Geological Survey Bulletin 2090 (1995), p. 4.
(94) Muntean, J., and Taufen, P., Geochemical Exploration for Gold through Transported Alluvial Cover in Nevada: Examples from the Cortez Mine, in Economic Geology, vol. 106 (2011), pp. 809-833.
(95) Felder, R.P., Strubsacker, E.M., and Miller, M.S., The History of Exploration and Discovery of the Long Canyon Gold Deposit, Elko County, Nevada, USA, in Steiniger, R., and Pennel, B., eds., Great Basin Evolution and Metallogeny: Geological Society of Nevada, Symposium 2010 Proceedings, pp. 141–151.
(96) Buskard, J., Generating and Advancing Blind Targets Using an Integrated and Multi-Scale Approach, Nevada Exploration Inc., January 21, 2020, AME Roundup, p. 64.
(97) See Nevada Exploration Inc., Quarterly and Annual Statements, Periods Ending December 31, 2006, to December 31, 2019, for verification of expenditures and statements regarding share structure. Restated figures have been used where applicable.
(98) Nevada Exploration Inc., News Releases, January 14, 2015, and August 31, 2015.
(99) Nevada Exploration Inc., News Release, August 10, 2015.
(100) Nevada Exploration Inc., Consolidated Financial Statements for the 4-Month Period Ended April 30, 2007, and for the Year Ended December 31, 2006, note 6.
(101) Nevada Exploration Inc., Exploring for Carlin-Type Gold Deposits, Reno, Nevada (October, 2018), p. 15.
(102) Nevada Exploration Inc., Corporate Presentation, January 23, 2020, pp. 12-13.