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How Much Gold Is Here?

Stockhouse Editorial
0 Comments| November 15, 2017

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Nexus focuses on advancing their Bouboulou project after an active 2017

Click to enlargeNexus Gold Corp is hunting big game in West Africa. Just under one year ago; NXS was trading at $0.07/share as the Company began initial drilling at its Niangouela Gold Concession, in Burkina Faso. Guided by nothing more than feedback from local artisanal miners, NXS produced a new gold discovery: hitting on eight out of nine drill holes. Included in this initial drilling were some very robust highlights, including:

  • 26.69 g/t Au over 4.85 meters (including 132 g/t Au over 1.03 meters)
  • 4.00 g/t Au over 6.20 meters (including 20.50 g/t Au over 1 meter)

This was followed up in June 2017 with maiden drilling at the Company’s Bouboulou Gold Concession. More strong results. Nexus hit on nine of 10 drill holes, with highlights such as:

  • 4.41 g/t Au over 8.15 meters (including 23 g/t Au over 1 meter)
  • 5.21 g/t Au over 3.05 meters (including 15.50 g/t Au over 1 meter)

Bolstered by these results, the Company’s share price soared as high as $0.36/share. However, as 2017 is winding to a close, the NXS share price is back to $0.07/share. What happened?

In the meantime, Nexus acquired a third land package in Burkina Faso. The Rakounga Concession is 250 km2, and directly contiguous to Bouboulou. The Company immediately began sampling activity at Rakounga and is currently conducting a 3,000-meter drill campaign on this new property.

The market has not been impressed. While there has been general weakness in gold stocks in recent months, NXS is still an underperformer. Few market pundits own their own crystal ball. Was Nexus being punished by investors for a (perceived) lack of focus?

With this possibility in mind, the Company’s management is targeting a specific goal as NXS moves into 2018: moving toward a resource estimate at Bouboulou. Stockhouse recently had the chance to pose some questions to Nexus’ Chairman & COO, Alex Klenman. He is here to discuss gold in Burkina Faso.


(click to enlarge image)

Many mining investors may still not be familiar with Burkina Faso. What makes this jurisdiction so attractive to gold mining companies?

Burkina Faso is relatively underexplored compared to other places on the planet. Modern exploration and mining has only been underway since the 1970s and early 80s. There are some prolific gold belts in West Africa, and Burkina is home to some very fertile ground. The government is pro-mining and, for us, with our previous history there, it’s a great fit.

While Bouboulou was the original land package acquired by NXS in Burkina Faso, you actually did your first drilling at the Company’s second property, Niangouela. What prompted you to send a drill there first?

When Warren Robb, our senior geologist, went over in the winter of 2016 to start a work program at Bouboulou, our local country manager took him to see Niangouela. Warren liked what he saw in terms of the artisanal activity and its relation to some prominent quartz outcroppings, so we went ahead and acquired the property. Early sampling produced some bonanza grades (2,950 g/t Au, 403 g/t Au) and the market reacted. These samples came from artisanal shafts at depth (40-60 meters below surface) and included visible gold. So naturally this caught our attention.

In the initial round of drilling at Niangouela, NXS hit on almost every hole, despite not having conducted any previous geophysical surveying. Please comment on this.

One of the most compelling aspects of working in West Africa is the artisanal presence, or local miners. Geophysics can tell you the environment is potentially right for gold deposition, but cannot tell you there is in fact, gold. With only geophysics, you still have to sink a drill into the ground to answer the fundamental exploration question. Artisanal miners, on the other hand, basically confirm gold mineralization. This dynamic takes the single biggest risk factor out of play for an exploration company. We go from “is there gold?” to “how much is here, and what are the economics?”.

You recently acquired a third Concession: Rakounga. What made this opportunity too attractive to pass up?

As you mentioned, Bouboulou was and is our primary project, despite the early success at Niangouela. Bouboulou simply has far more work done by previous operators, most importantly drilling by Roxgold in 2011 and 2012. Keep in mind, Warren was chief geologist with Roxgold at the time. He knows Bouboulou, and had a lead role in those previous drill programs. With all the historical data available, Warren was able to identify three distinct mineralized trends. Each run about 5 KM in length, and two appear to continue beyond the concession border to the southwest and west. That property is Rakounga. Not only do two of the three Bouboulou trends extend onto Rakounga, but there is an active artisanal presence there as well. Rakounga is an attractive exploration target on its own, but becomes even more compelling if we can establish a direct relationship to Bouboulou.

You have already done some exploration work at Rakounga. Please update investors here.

So far, we have identified three large orpaillages, or artisanal mining areas, at Rakounga that appear to be along trend with Bouboulou. We have already sampled each of the three zones, Koaltenga, Porphyry and Gounga, and each zone returned some significant grades (17.30 g/t Au, 19.95 g/t Au and 14.90 g/t Au). As a follow-up to sampling we are currently conducting a 3000-meter reverse circulation drill program that is targeting each of those three zones. If we can return some intercepts similar to the previous RC work at the adjacent Bouboulou property (10-20+ meters of 1-3 g/t Au), we’ll be pleased. That would be a great start to establishing Rakounga.

Given the successful exploration work completed to date, management obviously must be disappointed at the pullback in share price. Is this what prompted the decision to move toward a resource estimate at Bouboulou?

Well you are correct, we aren’t too pleased with the share price pullback. Personally, I don’t believe it has been an entirely organic event. In mid-September a large share position came into the market in a very aggressive fashion, triggering stop-loss and quite frankly, panic. This happened before drill results were announced – or even received - from the summer programs. That’s odd. We have a number of theories as to what actually occurred, but ultimately the collateral damage to our share price has been significant. In any case, the goal of pursuing a resource estimate at one of our projects isn’t tied to the recent market activity, but rather is and always has been, an integral part of our development plans.

From a Big Picture standpoint, please connect the dots on the potential for this trio of very prospective African gold properties.

The main thing is the last year of exploration and drilling has provided valuable intel on our properties. Niangouela has upside due to grade, but there is no getting around the fact it is a very early stage project. Our first drill results at Bouboulou were excellent, and, combined with the historical drill holes, begins to tell a pretty compelling story. We believe we have enough data to implement and execute larger scale drill programs with the goal of establishing a resource at Bouboulou. There are five main mineralized zones there, and we feel the potential to establish a resource is there. Rakounga, with its size and proximity to Bouboulou, suggests the possibility of something larger.

I think it is important to point out that in 12 months, Nexus has conducted no less than five drill programs at our properties. For a micro-junior, we’re proud of the fact we are active, and that we put dollars into the ground.

We have executed our plans to date. We acquire projects, we work the properties and we drill the properties. Exploration is full of risk however we feel our strategies do much to mitigate that risk. By working in areas of known mineralization, we sidestep that big “if” question and go straight to “how much”. By working multiple projects, we reduce risk even further. So, if project A doesn’t pan out, we still have projects B, C and D. Multiple projects provide additional avenues for success, so the company’s entire evaluation isn’t locked into a singular “drill and kill” scenario.

We are confident with our strategies, with our team, and our prospects. These are quality projects being managed by a crew that has already had discovery and development success in Burkina. These guys have basically hit on three of the four drill programs completed to date, with another underway now. That’s a really good winning percentage in the exploration space. After the work we’ve done, to us it’s a bit of a head scratcher our share price is where it is. We are also confident that if we continue to execute, it won’t be.

FULL DISCLOSURE: Nexus Gold Corp is a paid client of Stockhouse Publishing.


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