Sassy Resources makes bold move into Newfoundland’s mini gold rush

For several months, investors in Sassy Resources (CSE: SASY) / (OTCQB: SSRYF) have been waiting for all the drill results from the sizable, 100%-owned, flagship Foremore project in the Eskay Camp, at the heart of the Golden Triangle, in northwestern B.C. 11 of 17 holes have been reported, along with highlights of > 1,000 samples.

Nicobat to be spun-out for shares in exciting new battery metals play

As we were waiting, shareholders have been advised to watch for news on non-core asset Nicobat and for possible acquisitions outside the Golden Triangle. Well, that news arrived last week. Sassy is close to monetizing Nicobat by optioning it (for shares & a multi-year work commitment) to a private Canadian battery metals junior.

That company plans to list on the CSE in coming months. Management is optimistic about the prospects for battery metals, and Sassy would hold a meaningful position in this prospective play. Sassy’s team has executed very well in its short history as a public company.

While the Nicobat news is very good, the more exciting development is that Sassy has formed a wholly-owned subsidiary, Gander Gold Corp., (“GGC“) to pursue opportunities in the province of Newfoundland and Labrador (“NF“). CEO Mark Scott has started in NF by optioning eight promising claim blocks from Vulcan Minerals.

NF is one of the most exciting exploration districts in Canada. It’s the focus of a mini gold rush. Much of the action is in the Central Newfoundland Gold Belt, a large region stretching across the island, ~250 km in length. For centuries NF was mined for base metals, but it was not until much more recently that gold became a primary target.

Sassy enters mini gold rush in Newfoundland, still at early-stage

In the 1980’s Noranda did a lot of drilling all over NF, but in many cases (reportedly) did not bother assaying for gold! As New Found Gold’s (NFG) corporate presentation explains, “the Fosterville epizonal high-grade model was not understood at that time.”

GGC will enable Sassy to pursue options to generate shareholder value through meaningful project diversification outside of the Eskay Camp, with minimal shareholder dilution. NF offers under-explored opportunities, high-grade gold/silver + base metal potential, relatively low-cost drilling and the ability to explore year-round.

Management plans to mobilize to execute reconnaissance / orientation diamond drilling on drill-ready targets at Gander East this Spring. Gander East adjoins Jonathan’s Pond, where some of the highest grade till anomalies ever discovered in NF (up to 410 g/t Au!) were found. That mineralization trends onto parts of Sassy’s optioned property. Sassy now controls the closest claim block to NFG’s new Eastern Pond discovery.

Exploration programs this year will cover the rest of that property, plus the other seven blocks — plus any new properties added to the portfolio in coming months — with airborne geophysical surveys & pattern soil/till sampling and prospecting over the 2021 field season.

Although not mentioned in the press release, it seems reasonable to wonder if one day GGC might be spun out into its own publicly-traded vehicle. Perhaps not anytime soon, and not without some exploration successes, but something to think about.

Mr. Mark Scott, President & CEO, commented:

“We’ve taken some creative, forward-looking steps aimed at year-long value creation with Sassy establishing a major foothold in the prolific Eskay and Newfoundland mineral districts during transformational periods for each region. The Gander Gold subsidiary gives us various attractive options to leverage success for our shareholders.”

Sassy entered into an option agreement with Vulcan Minerals to acquire a 100% interest in eight claim blocks, (624 claims / 156 sq. km) including the drill-ready Gander North, a compelling target intersected by a major regional fault zone (the GRUB Line) ~15 km northeast of NFG’s tremendous new discovery — the Keats zone of its Queensway project.

NF stars Marathon Gold & New Found Gold leading the way….

In late 2019, NFG hit 93 g/t Au over 19 m and has had many other high & very-high-grade intercepts since then. Eight rigs are now turning as part of a 200k meter grid drill program. NFG’s Keats zone is one of the most significant discoveries in Canada of the past 20 years. (NFG market cap = $500M, pre-maiden resource). 200k m will focus a lot of attention on NF!

NFG’s Queensway project ranks among the top 5 pre-maiden resource projects in Canada, along with projects owned by Great Bear Resources in the high-grade Red Lake mining district in Ontario (GBR market cap = $800M) and Eskay Mining’s (ESK) 50,000+ hectares near the center of the Golden Triangle in B.C. (ESK market cap = $375M).

Since NFG’s discovery, a better understanding of the Gander Gold Belt’s blue-sky potential is emerging, making Sassy’s untested Gander North and its other claim blocks, highly prospective. Near Gander North’s western & northern boundaries, there are some extremely high gold-in-till anomalies.

Over a 4-yr. period, Sassy will pay $400,000 in cash to Vulcan, incur $2M in exploration expenditures and issue 2.5 million shares. Vulcan will retain a 3.0% NSR on the entire 624 claims, of which Sassy can repurchase 1.5% for $2M + 500,000 shares.

Marathon Gold has an Enterprise Value (“EV“) {market cap + debt – cash} of ~C$560M. Its single project, at PFS-stage, is in central NF. The Valentine project is expected to reach production within three years. At US$1,550/oz. gold, the after-tax NPV(5%) of the 12-yr. mine = C$671M / [48.8% IRR].

The AISC = US$739/oz. (bottom quartile). An NPV of C$671M is 2.5x the project’s upfront cap-ex of C$272M, making it one of the best in North America, which is why Marathon enjoys a premium valuation; EV/NAV = 0.83x.

Sassy’s Gander Gold subsidiary alone could be worth $20M+

There are no Majors or mid-tier gold producers in Newfoundland. However, I would not be surprised to see Marathon & New Found Gold acquired. After that, there are roughly three dozen juniors with gold prospects in NF, ~12 of which have market caps between $20-40M, one ~$55M.

If management can deliver good drill results, I think it’s reasonable to think that Sassy’s NF properties & exploration activities, (the assets held in GGC), could support a $20M+ valuation. Given Sassy’s tight capital structure, a $20M valuation for GGC alone would be worth ~$0.50 per Sassy share. Sassy’s shares are currently at $0.54.

And, if Sassy can conduct multiple drill programs that hit attractive grades, with multi-meter interval widths, then a valuation north of $25-30M would be possible. Having said that, it might be necessary for Sassy to spin out GGC for its value to be more fully recognized by the market.

There’s more news to come from Sassy in NF. Management continues to review possible farm-ins & acquisitions of exciting properties / projects under attractive deal terms. And exploration / prospecting will be starting this Spring, with the goal of identifying drill targets for 2H 2021.

The Copper price soaring is great news for Sassy Resources!

Finally, with the #copper price soaring, late last week breaching $4.00/lb. for the first time in nine years, readers are reminded that Sassy’s flagship Foremore project has considerable copper showings that warrant further exploration. Copper is now at $4.15/lb., a 9.5 year high. I asked CEO Scott about Sassy’s Cu prospects, he provided the following quote,

There’s significant copper potential at the Foremore project, including along the > 5 km More Creek VMS Corridor, and on several potentially multi-km long lineaments in the Hanging Valley. In 2019, the Heather showing produced a grab sample containing 21.4% Cu. The province of Newfoundland and Labrador has a long history of Cu & Zn exploration and production.

We will certainly be sampling for these metals as we explore our new holdings there. Most of the properties we have optioned have some form of anomalous Cu soil / till / lake-sediment / stream-sediment / outcrop samples, together with known gold / pathfinder occurrences and favorable structural environments.

Conclusion

An investment in Sassy Resources (CSE: SASY) / (OTCQB: SSRYF) gives investors exposure to two potentially world-class, gold / silver projects. Both have copper kickers. Both are in safe, prolific jurisdictions. Both have high-grade potential. Both are sizable footprints (Foremore = 14,600 sq. km / Gander Gold Corp. 15,600 sq. km to start, expected to grow).

Management, led by CEO Mark Scott, is top-tier, especially for a company with an EV of just C$20M. The pullback in the gold price from over $2,060 oz. in early August 2020 to about $1,810/oz. today, has caused many top-quality gold juniors to trade 40%-60% lower from 52-week highs.

At $0.54/shr., Sassy is down 56%. Freegold Ventures & Fury Gold Mines are each down 63%, producers OceanaGold Corp. & Victoria Gold are down 53% & 44%. So, Sassy is not alone in this junior market sell-off.

Readers are encouraged to dig deeper into the Sassy Resources story, review recent press releases, and watch for upcoming news on both the NF strategy and the flagship Foremore project. With Copper, Zinc, Silver, Nickel & Cobalt up between 45%-68% from a year ago, it makes no sense for Sassy shares to be down so much from a high of $1.24.

At current levels, the Company’s EV is just $20M. This valuation could be a very good entry point for readers with an appetite for high risk/high potential reward investments.

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