I wrote about the incredible coup that Nexus Gold Corp. (NXS:CVE) scored in Burkina Faso back in early December. Basically they have picked up two potential home runs in the best country to explore and build a mine in, in the entire continent. Using the skills of the former Chief Geologist for Roxgold, Warren Robb, the company managed to scarf up two good properties for about US$1.5 million each but the deals are rear end loaded and have a tiny 1% NSR. They have two years to test the crap out of the projects before big bucks are due so the money they raise now goes directly into the ground rather than into the landowner's pocket today.
One thing I have learned over the last fifteen years and seeing hundreds of projects is that the interests of the landowner and the company doing the deal have to align. In 100% of the cases I've seen where a big front end payment is made, the landowner immediately does everything in his power to queer the deal so he can go flog the property to some other damned fool. In Tanzania I've seen one project with a lot of gold in the ground get pimped out to four different groups in five years. The landowner realized he could make a lot more money on front end payments than from actually producing gold.
On January 11th, Nexus Gold published a press release detailing some of the best results from the initial RAB program and grab samples. So far there have been 556 test pits, and 11 trenches sampled with nice numbers coming up. Rock samples done before the deal was concluded came back with values up to 18 g/t gold. Soil samples tested as high as 34 g/t gold.
The testing the company has done since signing the acquisition in early December has generated incredible bonanza grade results as high as 2,950 g/t gold. For those who can't do math in their heads, a ton of that rock would be worth $114,183.54 roughly at $1204 gold. For gold that rich, you could measure in percentage of gold rather than grams per ton or PPM. Another sample, NG006 returned a more reasonable value of 23.9 g/t gold.
Peter Berdusco, President of Nexus, wanted to talk to me about the results and how excited the company was. Certainly a sample of $114,000 rock should excite anyone. But in the real world, those sorts of grades are one-offs. I actually have never seen a piece of $114,000 rock before. I was more excited by the 23.9 g/t material. That indicates something far more doable.
Peter talked for a few minutes before I interrupted. As a matter of simple logic, the purpose of a press release is to communicate. Not to inform but to communicate, and there is a big difference. If you ask web designers to give you one word that describes what a website is supposed to do they will almost always give you one of two different words. People think of the web either as information or communication. Those who think of the web as information make lousy web designers. A telephone book is information. A telephone is communication. Big difference between the two.
I suggested to Peter that a press release should answer questions, not ask them. As soon as I saw the number of 2,950 grams per ton, I pulled up my handy Rocks in the Box URL and fed in the number. As of yesterday, the rock was worth over $111,000. Today gold is higher. You should keep that URL by the way; it makes putting assay results into context a whole lot easier.
Their press release informs but does a really lousy job of communicating. I asked Peter how he could collect a sample from the primary vein at 46 meters below the surface? Was it from drill core or a RC sample? If it was from drilling, how long was the interval? Do you understand my issue?
To say a sample is 2,950 grams per ton is pretty meaningless. What is the sample? Was it a 20,000-ton bulk sample or a nugget that someone dropped on the floor? Was it a .005 MM true width of core or a 40-meter intercept? If it was from a 20,000-ton bulk sample you could either retire rich or bribe Hillary Clinton to sell you an ambassadorship.
Peter explained patiently that it was a 46-gram sample that had been chipped off the target vein 46 meters from the surface down a shaft put in by the artisan miners. All it represented was an extremely high-grade chip off the vein that Nexus is targeting. The other 23.9-g/t sample was taken off a pile of material to be processed by the artisan miners and it represented a sample of the shear zone material from 60 meters down another shaft.
My comment to Peter was that he should have and could have explained what the results meant and defined what a sample was. If he could explain it to me over Skype, he could have put it in the press release as well.
There were a few diamonds among all the coal in the press release. The primary quartz vein has been traced over a 1000-meter length. The secondary target, the shear zone, appears to run for 500 meters and is splayed off the primary vein system. The press release appeared to be about results from the RAB program but there was no communication about how many holes or how deep they were or what the intercepts were or the grades other than a single 1.05 g/t gold assay over 12 meters in hole 19.
In short, the press release reported easily the best results I have ever seen announced in the most poorly written press release I have ever read. I think Nexus is on to something giant. But they need to stop informing and start communicating. Whoever wrote that press release should not be writing press releases.
As I explained in my early December piece, Burkina Faso is one of the best places to explore in the world. If I could find a piece of VG just by chipping on rocks while eating a sandwich at a rest stop far from any exploration workings, there is a lot of gold in the country still waiting to be found.
Nexus Gold has doubled since I wrote my piece in early December. Those readers wise enough to invest have done well indeed. It's nice to have a double in five weeks any time at all.
My "OPINION" and that's a big opinion because I cannot support it with the scarcity of information in that really rotten press release, my opinion is that if the 1000 meters length for the primary vein system is accurate or the 500 meters length for the splayed off shear zone, I think they have found a really big deposit.
Obviously they need to do a lot more drilling but they have one of the finest and most experienced technical people in Burkina Faso in the person of Warren Robb. A lot of my attitude toward the project is really based on his experience in Burkina Faso and his just plain good sense. I like the company and the project a lot. But if that press release had been written in simple clear English, the stock would have doubled instead of going up 16%.
Nexus is an advertiser. I have bought shares in the open market based on those results. There will be a private placement and I am sure I will participate in it as well. I am naturally biased. Please do your own due diligence.
Nexus Gold Corp.
NXS-V $0.14 (Jan 11, 2017)
NXXGF-OTCBB 96.6 million shares
Nexus Gold website
Bob and Barb Moriarty brought 321gold.com to the Internet almost 16 years ago. They later added 321energy.com to cover oil, natural gas, gasoline, coal, solar, wind and nuclear energy. Both sites feature articles, editorial opinions, pricing figures and updates on current events affecting both sectors. Previously, Moriarty was a Marine F-4B and O-1 pilot with more than 832 missions in Vietnam. He holds 14 international aviation records.
Want to read more Gold Report articles like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see a list of recent articles and interviews with industry analysts and commentators, visit our Streetwise Interviews page.
Disclosure:
1) Bob Moriarty: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Nexus Gold. The following companies are advertisers on 321 Gold: Nexus Gold. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned in the article are sponsors of Streetwise Reports: None. Streetwise Reports does not accept stock in exchange for its services. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview/article until after it publishes.
