Go BIG or go home… will NuLegacy Gold crack the Rift Anticline code in 2021?

Significant drilling will commence again this Spring on NuLegacy Gold Corp.’s (TSX-V: NUG; OTCQB: NULGF) highly prospective Rift Anticline target on its flagship 108-sq. km Red Hill gold property in Nevada’s prolific Cortez gold trend. The drilling of 12, perhaps 13 more holes will start in April. These will be much deeper holes than have been drilled in the past, up to ~4,000 ft.

On January 15th management announced the rapid (five business days) subscription for a 100M unit private placement, (gross proceeds = $12.5M), expected to formally close this week. Will 2021 be the year that NuLegacy cracks the code of the Rift Anticline formation on its large property?

Go BIG or go home drill program starts in April….

CEO & Co-Founder of NuLegacy, Albert Matter commented,

“Completing this financing is critical as it allows NuLegacy to start contracting for the much bigger and more expensive deep drilling rigs, and the superior drill teams needed, that will soon be in short supply…. enabling us to accelerate our expanded Spring/Summer drill program….”

Readers may recall that management is laser-focused on confirming high-grade Carlin-style gold deposits over the roughly 6 sq. km Rift Anticline target on its flagship Red Hill property. This target is on trend and adjacent to Barrick Gold’s three multimillion-ounce, high-grade deposits (Pipeline, Cortez Hills & Goldrush).

Across the district, the Rift Anticline hosts giant projects such as the 10M+ ounce, 10 g/t gold, advanced-stage Goldrush project, located ~10 km northwest of Red Hill.

Over the years, NuLegacy has enlisted eight former Barrick employees, board members and/or advisers. Including the very well-respected Roger Steininger — not from Barrick — who led teams that discovered the South Pipeline & Long Valley gold deposits, this world-class group, the “nitid nine,” is credited with discovering > 50M ounces of gold in Nevada.

A powerhouse technical team unleashed, no holes barred!

Dating back to the mid-1980s with Alan Hill, NuLegacy’s team & advisors (while at Barrick and at other companies before joining NuLegacy) have greatly advanced the understanding of Carlin-style gold systems.

Modeling the geochemical, geophysical and drill data of the Rift Anticline in north central Nevada has evolved to the point that NuLegacy’s team is confident the Wenban5 unit hosts mineralization. The question is; how uniform and what grade?

On December 15th, a corporate update was delivered on the first four drill holes. Wide intervals of the Wenban5 stratigraphic unit were confirmed. Holes 1 & 2 were drilled to an average depth 607.5 m, and holes 3 & 4 to an average depth of 850.5 m.

These deeper holes are expensive, which is why the Company raised additional funds. Assays from the first two holes contained numerous intercepts of anomalous gold values, but no flashy grades to brag about.

However, Ed Cope Director, Exploration remains enthusiastic,

“I’m very impressed with these results. There are numerous subtle signs in the geology & geochemistry of these results that are difficult to articulate in a brief news release, and might appear inconsequential to the uninitiated, that indicate there’s a significant gold deposit ‘lurking nearby’.”

The Wenban5 horizon hosts 75% of the gold in Nevada Gold Mines’ giant, high-grade Goldrush project. Importantly, the presence of a thick section of Wenban5 underneath basalt cover was predicted by NuLegacy’s geologic team to within 10 meters — an impressive feat of interpretative geology! 

There’s gold on the 6 sq. km Rift Anticline, but how much? What grade?

The presence of a Carlin-type system was intercepted at an average depth of ~332 m with an average thickness of ~173.5 m. It appears that none of the Wenban5 horizon has been eroded or faulted off as was the case in prior hole that idenified smoke, {11.0 g/t over 12.2 m, 16.9 g/t over 8.7 m, 9.6 g/t over 5.1 m, found well to the east of the Rift Anticline}, but no fire.

The reason why Quinton Hennigh and others are so excited about the ongoing exploration of NuLegacy’s portion of the Rift Anticline is that a close analog is none other then Barrick’s 10M+ ounce Goldrush deposit.

I mention Mr. Hennigh because he’s been talking about Nevada’s Rift Anticline for months. {Please click on video clip above of Jay Taylor interviewing Mr. Hennigh}.

In the comparison slide below, select metrics of the Rift Anticline, as expressed on NuLegacy’s property, compare favorably to that of the Goldrush project with respect to deposit width, Wenban5 thickness & depth. Grades & continuity of mineralization are critical unknowns that will make or break the NuLegacy Gold story.

Regarding the importance of understanding the structure at Red Hill, Mark Bradley, VP Exploration commented, 

“Our advanced structural modeling of the Rift Anticline is a very powerful exploration tool, permitting us to prioritize our initial drilling efforts within the large, 6 sq. km Rift Anticline surface area, thus optimizing our chances for discovery.”

One might look at this Rift Anticline target “up close” slide, and wonder if the Wenban5 horizon at Red Hill is too small.

No! Management & advisors have been explaining that the dimensions of the Wenban5 horizon on NuLegacy’s property are sufficiently large to (potentially) host millions of ounces (if the grade is reasonably good and there’s decent continuity).

Twelve, perhaps 13 more (deep) holes this Spring/Summer

Once width, average thickness & grade are reasonably well established, some preliminary estimates of the potential volume of the gold-bearing Wenban5 unit can be made. 

The remaining 12-13 of a 16-17 hole drill program are fully-funded and scheduled for completion this Spring/Summer. However, with the newly raised cash, these holes may be drilled deeper than originally planned and possibly faster (multiple rigs).

Listening to the podcast embedded above — which patiently walks listeners through the reasoning behind the bullish Rift Anticline thesis — it’s clear there’s potential (but, no certainties) of a very large gold system.

I have no insights into how much gold the Rift Anticline on NuLegacy’s property might contain, but management and advisors believe that the dimensions make millions of ounces a distinct possibility.

Readers should note that due to size, grade, depth & continuity factors, the vast majority of gold-prospective properties around the world have 0% probability of hosting a potentially economic 5M+ ounce deposit.

Even a 2 to 4M ounce resource in Nevada would be quite valuable. In the chart below are seven companies from high-quality jurisdictions in N. America.

Multi-million oz. deposits in Nevada are quite valuable

Resource estimates range from 0.67k to 3.7M ounces. Enterprise Value {market cap + debt – cash} (“EV“) divided by ounce values range from C$45-$195. The average EV/oz. figure = C$89/oz.

All else equal, if NuLegacy were to delineate 2M ounces, it would be trading at just C$29/oz. While we’re not there yet, line of sight beyond the # of ounces contained in a maiden resource will hopefully come into view. There might be a conceptual multi-million oz. resource target to contemplate later this year.

These peers are more advanced than NuLegacy, however readers can imagine what a multi-million ounce resource could potentially be worth if management achieves notable drilling successes this year. The average EV of these peers is ~C$191M vs. ~C$58M for NuLegacy.

Conclusion

All eyes are on NuLegacy’s drill program. It will be a substantial campaign. While no one knows what the drill bit might find, the Company’s expert technical team is optimistic about the potential of unlocking new clues in the Rift Anticline.

NuLegacy Gold (TSX-V: NUG; OTCQB: NULGF) has proven that it’s not easy to find a needle in a haystack, but 2021 could be the year that it happens. No matter what unfolds, 10 years of exploration on the Red Hill project will never go to waste. This is very valuable data, increasingly so, in today’s gold bull market.

Ideally, NuLegacy can find significant smoke, or fire! that warrants continuing to advance the Red Hill project. However, given a chance, a mid-tier or Major gold player would very likely pick this up and run with it.

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