NV Gold Does $10 Million Deal with Hochschild in Nevada
NV Gold (NVX-V) has what might be called an embarrassment of riches. I have put money into the company in a bunch of placements and never had until now a single warrant ever make it into the money. I would put money into NVX, the stock would wander around and never do very much and the warrants would end up as wallpaper in my bathroom.
A big part of the confusion is in the fact the company has a lot of projects and frankly it was really hard to see what if any direction the company was moving. That just changed big time with the announcement of a $10 million option with Hochschild Mining about ten days ago.
Within NV Gold’s fourteen projects is one called the SW Pipe property. It consists of eighty-four claims that NVX picked up for the cost of staking in the Cortez Trend. It is 100% owned by NVX with no underlying NSR to anyone. The SW Pipe is about six km from the twenty-one million ounce gold mine owned by Barrick called Pipeline. The SW Pipe comes with a tiny historical gold resource of between 40,000 and 50,000 ounces based on vertical drilling that took place between 1989 and 1997.
Hochschild signed an option agreement with NV Gold where they can earn a 51% interest for spending US $7.5 million over a five year period and paying NVX about $813,000 in USD in the same time period. To get up to a 75% interest they need to spend an additional $2.5 million and do a feasibility study. And should they determine that they want to own 100% of SW Pipe then they need to pay NVX $25 million USD or 12,500 ounces of gold at NV Gold election. NV Gold will run the exploration program and gets 5-10% of costs for all work.
That’s a hell of a deal for a junior to make. It is a no lose deal with a major mining company whose work has been exclusively in Central and South America up until now. If Hochschild spends $10 million US on exploration and then thinks it’s worth buying, that’s $25 million USD for a single project in a company that only has a $15 million USD market cap right now.
And for the icing on the cake, on the 5th of May NV Gold announced a fully subscribed $3 million placement. I spent some time on the phone with President Peter Ball and his intention is to go aggressively in advancing the best of the other thirteen different properties. In my view, this is the year the company is going to take off. They are funded for a lot of exploration and will be bringing in revenue from the exploration at the SW Pipe deposit.
NV Gold is an advertiser. I have participated in a number of private placements and bought shares in the open market. I will be participating in the latest PP. Do your own due diligence.
NV Gold Corp