Nevada King Delivers
We are in the end stages of one of the worst bear markets for resource stocks that I have ever seen. True, we had bear markets in 2000 and 2008 and 2015 and 2020 but in each of those crashes, the metals went down and the shares followed. For the first time in my memory, the metals are pretty much holding up but the resource shares have been destroyed.
That’s the good news if you are a contrarian. 80% of investors are sheep who want to buy at tops and sell at bottoms. When they lose money it was caused by someone else. The sheep are in a mad rush to sell lately so they can capture the bottom.
Rick Rule has another take on these markets. Three weeks ago at the Cambridge House Investment Conference held in Vancouver David Lin interviewed Rick and asked him to compare 2016 to now. His response was interesting.
2001, 2009, 2016 and 2020 were brilliant times to own junior resource stocks. As soon as the mob finishes dumping all their shares at the very bottom we are going to be in another great ride.
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While my next company crashed from $.77 to $.17 from 2019 into the March 2020 Covid disaster, from that bottom until December of 2020 it climbed to $.84 for an advance of 400%. I think it will do the same from the near-term bottom on the way.
I’ve been visiting resource projects and writing about them going back as far as 2001. Now and then I get to write about a project that I saw many years ago. Today I get to do the same.
Nevada King Gold (NKG-V) owns 100% of their flagship property called the Atlanta Gold mine in Nevada. Nevada King has picked up so much ground in Nevada that they are the third largest land owner and soon will be the second. In any case, in 2018 they picked up the Atlanta Gold mine complete with mill. While the project came with an existing historic resource of 460,000 ounces of gold and 3.8 million ounces of silver, NKG upgraded the resource in 2020 to just over 600,000 ounces of gold and about 4.5 million ounces of silver based on a total of 40,000 meters of drilling by various owners.
While the deposit was discovered as early as 1905, it was actually in production from 1975 to 1985 on a tiny basis of 11,000 ounces of gold and 80,000 ounces of silver yearly. The mill equipment was from other projects and probably was old in 1905.
I went to visit the Atlanta Gold mine in the summer of 2011. Silver had already topped and gold was about to top. A company named Meadow Bay bought the project for about ten million. That’s not a bad price for that sort of resource but their timing was the worst in all of mining history. They picked the very top of the market.
Reality soon hit the metals market and 2011 through 2015 were an utter disaster for everyone in precious metals and stocks.
Meadow Bay bit the bullet in 2018 and sold 100% of the project to Nevada King for $1 million. There were a few other fairly meaningless properties with the deal but Nevada King was focused on Atlanta.
Nevada King is going to be a powerhouse in Nevada led by a pair of two of the most interesting people in mining.
In 2002, shortly after we started 321gold, we were dealing with the IR person of another tiny junior that we got along great with. Alas, he departed for greener pastures. He went from the IR work to starting new companies, advancing them and eventually selling them. He did that with five publicly listed companies selling for over $2 billion over the next twenty years. That of course would be the founder and Executive Chairman of NKG, Paul Matysek.
But his co-founder of NKG is on the same path, owning 18% of the company. Collin Kettell is just as interesting and well on his way to creating companies with as much or more potential than the $2 billion created by Paul. He is the co-founder, Chairman and CEO of New Found Gold. No one I know has the courage to even guess how many million ounces of gold NFG will end up with. They are a Fosterville look-alike but with high-grade gold starting at surface.
NFG is half a dozen miles from Newfoundland’s largest airport, Gander. I have flown in and out of Gander over a hundred times ferrying small planes to and from Europe and Africa. If I had realized there was so much gold in walking distance to the airport, I would have carried my gold pan with me.
Collin’s father was in the mining business as co-founder of the company that was bought by Fronteer for their Long Canyon project sold to Newmont for $2.3 billion. I met Collin probably 15-18 years ago when I attended a gold show in Las Vegas. I fondly remember getting him tossed out of a casino for the first time. While he was large for his age, the management didn’t approve of a teenager being taught how to shoot craps next to the table. No sense of humor I suppose.
So what we know already is that Atlanta was a small gold producer for a decade. A junior bought it at the very top of the gold market only to give it away to Nevada King almost a decade later at ten cents on the dollar.
This was before they picked up Atlanta from Meadow Bay. Cal and Collin looked at Atlanta and realized that buying gold for less than $2 an ounce or buying silver for $.25 an ounce was probably a good deal. Cal looked around at the 6km caldera at Atlanta and believed the project had district scale potential.
In 2021 NKG conducted a small, 7,000 meter drill program where they literally hit the gold jackpot. They poked five holes into the bottom of the historic pit in an area previously undrilled. All five holes hit over 100 gram/meter intercepts with the best showing 54.9 meters of 5.34 g/t gold. In addition hole 3 of the program tapped into 9.1 meters of 8.26 g/t gold some 560 meters north of the pit.
The prior 40,000 meters of drilling by various companies all presumend the mineralization was created by a single fault feeding the gold vein. The drilling after 2021 made the company realize that interpretation was not correct and in fact there were multiple step down structures being fed from several different faults resulting in multiple pathways for the gold.
Drill programs since 2021 show the new way of looking at the gold mineralization is resulting in literally a slew of high grade gold intercepts in excess of 100 gram/meter. For many weeks the Atlanta drilling has produced the highest gram/meter intercepts of any Canadian company. They literally have hit the jackpot. They bought the project cheap at the right time and poured money into a serious drill program. The 2023 drill program at Atlanta was in excess of 76,000 meters with 137 holes awaiting results.
NKG is operating three RC drill rigs at Atlanta. 2023 results including many 100 gram/meter holes showed results as high as 100.6 meters of 3.39 g/t gold in hole 30 and 102.1 meters of 2.45 g/t gold in hole 23 with 108.2 meters of 11.64 g/t Au in hole 44. Plans are in place for a follow up 30,000 meter drill program for 2024.
The company has never issued warrants with any placement and most placements were done over market price. Insiders and large shareholders control about 60% of the shares.
The next major move will be to update the 43-101. Look for that in about six months as the company reports and digests the remaining 137 holes.
Nevada King is a sleeper unknown to many but run by one of the best and most forward thinking teams in Nevada. And youngest. NKG is an advertiser. I have participated in a private placement in the past and I am biased. Do your own due diligence. You can start here at the presentation.
Nevada King Gold Corp