Concerning numbers My position isn’t large but significant enough that I pay attention to reported results. That being said, I’m not impressed with this new 2-year game plan. Like most, I’ve waited somewhat patiently for the new management and initiative to show promise. There were some encouraging early signs: most money raised by the company to start a program and most metres drilled in a single campaign. Some analysts were also early converts actively promoting the ambitious 2 year endeavour. In particular, the head cheerleader at Sprott who’s writings include a steady dose of esoteric number crunching and platitudes, yet has failed to recognize the most obvious and telling gauges of success. Outside of the latest MRE, these are the most disturbing numbers I see. The company drilled 272 holes for 72,325 metres in their 2021 program of which only 168 holes for 41,407 metres have been reported. The math is simple...only 62% of holes drilled have been reported and 57% of the metres drilled. So 104 holes and 30,918 metres are left unaccounted for or roughly $13 million of drilling! These are miserable exploration numbers lacking any company/analyst explanation and shrouded by selective disclosure.
Year one of the two year program has delivered the worst news flow to-date, generated the poorest drill results and intersection rate, and the weakest share performance including several 52 weeks lows. Also worthy of mention is the absence of new discoveries despite all the promotion on the abundance of “low hanging fruit”. Yet the company reports a sizable expansion of its resource. This despite the modest drill results reported since the last resource?? It seems the approach used for the last two estimates has been to drop cutoff grades and decrease the average grades of all deposits. This has resulted in more contained ounces but at a significantly lower grade for the 2022 MRE. Given its remoteness and complete lack of infrastructure is it realistic to believe that a 1.38 gram open pit deposit has a chance?
To get a sense of how this resource compares on a deposit to deposit basis to the 2021 resource estimate one can simply apply the current 2022 resource lower cutoffs and average grades to the previous 2021 resource cut-off sensitivity table as published in their 2021 resource technical report. The results are rather eye-opening as the exercise produces essentially the same resource numbers as reported for the 2022 estimate! Obviously this is more of a thumbsuck exercise and not to be relied upon, but it does provide some general insight; hinting that really not much has been accomplished over the past 12 months despite all the drilling and exploration expenditures. The data is readily available for all so anyone can quickly do the same simple comparisons.
I have been long on NHK but getting more and more frustrated with how things have played out so far. Management needs to get on track and deliver some meaningful progress pronto, as the above observations point to a different and increasingly troublesome reality. This fertile land package deserves a far better effort than shown to-date, otherwise the 2-year game plan risks evolving into a multi-year struggle.