J. Ian Stalker, who has had a long—more than 45 years—and storied history in mining exploration, development and operations, including working in West Africa for more than a decade, has become the non-executive chairman of Nexus Gold Corp. (NXS:TXS.V; NXXGF:OTCQB), a gold exploration company with projects in Burkina Faso and Canada.
During his career, he has taken more than 10 mining projects through feasibility, development and construction phases, and has raised more than $500 million in capital investment.
His high-level positions in gold mining include stints as managing director of Ashanti Goldfields Co. Ltd., which later became AngloGold Ashanti; vice president of Gold Fields Ltd.; and CEO of Brazilian Gold Corp.
Companies under Stalker's management have seen significant market cap growth. He was the CEO of UraMin, a uranium company that was acquired by Areva for $2.5 billion in 2007. As president and CEO of LSC Lithium, he guided that company to a recent $111 buy-out, a 30% increase in market price.
Alex Klenman, president and CEO of Nexus, told Streetwise Reports, "Ian has been on the Nexus board for almost one year, and is now stepping into a greater role as non-executive chairman. He has M&A success behind him, discovery success and development success."
Ian Stalker told Streetwise Reports, "I was part of the team at Ashanti Goldfields when we went from producing 120,000 ounces a gold a year to over 1 million ounces a year by the end of 1998. We began to look at projects outside Ghana, where Ashanti was based, and we looked at Burkina Faso, Mali, a range of countries, so I got very familiar with that part of West Africa."
"When the opportunity came up with Nexus, with a prolific exploration area under its control in Burkina Faso, I was very happy to take up the position of non-executive chairman with it," Stalker explained. I was also attracted by the quality of the people; I am working with a really top-class group."
"When Ian accepted my invitation to join the board," Klenman explained, "Nexus was in the throes of a Howe Street death grip. We had 147 million shares out and the previous management had depleted the treasury. The share price was under $0.05."
"The company has turned around. We have a little bit of money in the bank, we're moving forward, we've had some success on the ground," Klenman stated.
Ian Stalker's "experience, knowledge and guidance will be of great benefit to the company, and of even greater importance as the next few years are critical in our growth cycle," stated Klenman. "Having Ian on board in a more prominent and active position with Nexus is something our shareholders can be excited about. His track record in helping to grow company evaluations is impressive."
Stalker joins Nexus' chief geologist, VP of exploration Warren Robb, who also has a long history in West Africa. "He was Roxgold's chief geologist in 2011–12 when the company discovered Yaramoko in Burkina Faso; it is now an extremely high-grade mine," Klenman explained. "That mine essentially made the company."
One of Nexus' goals, Klenman stated, "is to become a larger player in West Africa in exploration and development."
Jurisdictional risk can be a concern for investors. "On security issues, Burkina Faso has had a couple of incidents, which was never an issue when I traveled there in the 1990s and early 2000s," Stalker stated. "But we have chosen an area where security is very solid; it's been a very strategically controlled area by the government, so security-wise, you can discount a fair bit of the risk."
"Additionally, there are a large number of mining companies right around us, so in the area where we are working there are known deposits both of size and economies where companies can mine gold on a regular basis and produce it in an economic fashion. That adds a lot of value to the exploration environment we find ourselves in," Stalker explained.
The company's primary and most advanced project is Bouboulou, located in central Burkina Faso; it was once owned by Roxgold, and at the time was known as Bissa West. Roxgold did some work on the property, but after the Yaramoko discovery, the property became available, and Nexus acquired it.
According to the company, drilling confirmed five mineralized zones on the 38-sq-km Bouboulou property and three different trends that cross Bouboulou in a southwestern direction. "We felt those trends were going to cross the 250-sq-km Rakounga property, so we acquired it, which gives us a combined contiguous package of about 288 sq km," Klenman explained.
"We established three drill tested zones on the western flank for Rakounga. In a subsequent soil program, we were able to connect them at least in terms on anomalous surface; it's about a 16-km trend, with eight known zones. We've put about 50–60 holes down between the two concessions and are about a third or halfway to a resource estimate there, depending on how the next bit of work goes. We are hoping we can fill the gaps between the three zones at Rakounga and the five at Bouboulou." Klenman stated.
Bouboulou/Rakounga is a typical West African open-pit, low-grade bulk tonnage project.
Nexus' other two Burkina Faso properties, Niangouela and Dakouli, have a very different story.
"Warren Robb thought that the set-up at Niangouela, which is northeast of Bouboulou, was in his mind very similar to what he saw at Yaramoko, so we did a quick sample program, and came back with 2,950 g/t, 403 g/t samples, absolutely outrageous for West Africa," Klenman stated.
Nexus then ran a drill program there, and got a 26 g/t hit over almost 5 meters. "More drilling showed us the nature of the beast, that it's more of a spidery vein with high-grade shoots that requires a lot more money and a lot more drilling to get done, Klenman explained. "We like the grade there and will perhaps joint venture it out."
Dakouli is the company's latest addition in Burkina Faso, on which it obtained a nine-year mining lease. The property comprises 98 sq km just south of the Niangouela concession. The company was attracted by the artisanal activity on the property, miners digging down 40–50 meters with 400–600 meter strikes.
At Dakouli, Nexus conducted a very preliminary sample round and came back with "several gorgeous, beautiful visible gold in quartz chunks, very nuggety samples, which you don't often see there," Klenman stated. "They were 26–29 g/t, just grab samples, but certainly what you want to see as a phase one or two on the property."
Klenman noted that the company just completed another 100 samples at Dakouli and expects the results soon. "We are trying to build our visual databases as to where we think the best drill locations. We are currently doing a soil grid program there; the more data we can build at Dakouli, the better because there really is no history there. We're going to have to make sure we build our data methodically over the next few months before we start a drill program, but we really like the grade at Dakouli and at Niangouela. I think there is a higher grade opportunity there."
"From an overview position, there has been a significant amount of work to identify targets on the ground, and these were followed up by preliminary and secondary phase drilling. So we have a pretty good database, one in fact that brought on the streaming company, Sandstorm Gold Royalties, that came to look at our data and gave us money to continue our work a year ago," Stalker stated.
With the funding the company has been raising and completing on, "we will run another drill program this year, which will be underway very soon," Stalker noted. We hope that it will add to the growing knowledge of the geology in the area and provide a confirmation of the quality of the targets."
"We are optimistic that at the end of this year and into next year, we will have a 43-101 resource available to us," Stalker stated.
"All in all, in Burkina Faso we have over 550 sq km of ground, a sizeable package, all in the Boromo-Goren greenstone belts," Klenman stated.
"It is a dual narrative. The majors will keep an eye on the low-grade, bulk-tonnage situations at Bouboulou/Rakounga. When we come to market with the size of the compliant resource, that will get some attention," he said. "The retail investor may not be as excited about that, but they would certainly be excited about the high-grade results at Dakouli and perhaps more at Niangouela."
Nexus has also been diversifying beyond West Africa. In January, the company completed the acquisition of the New Pilot Gold Project in the Bridge River Mining Camp in British Columbia. A second Canadian project, the McKenzie Gold Project in the Red Lake region of Northwestern Ontario, was acquired in February.
The Canadian properties provide year-round activity for Nexus. "We can work on the ground on the Canadian projects in the summer, when it's rainy season in Burkina Faso, and the rest of the year in West Africa," Klenman stated.
"The footprint in the Canadian camps, in a very steady, understandable and transparent part of the world, is balanced by the footprint in the Burkina Faso projects, which are hugely exciting from an exploration and potential point of view," Stalker explained. "For investors, that makes for a very interesting investment decision and not just putting all your eggs in one basket."
"I think there is the potential to grow Nexus not just into a Burkina Faso company, but to a much larger West African company, that adds a lot of potential value to the company and gives you that size one needs to have in order to get proper attention," Stalker stated.
Nexus currently has 42 million shares outstanding, 61 million fully diluted. Sandstorm Gold Royalties is the largest shareholder, having taken a 17% equity stake in the first post-consolidation financing in May 2018, and it holds a 1% NSR on Bouboulou, Rakounga and Niangouela.
"Sandstorm will get its revenue when the projects go into production, so given that we are at the exploration and development stage in our lifecycle, that's a tremendous vote of confidence," Klenman explained.
Industry analysts have Nexus in their sights. Equity.Guru, in a February 12, 2019 update on the McKenzie project in the Red Lake Mining Camp, noted Nexus "will be active on at least five geologically prospective fronts this year. With 42.29 million shares outstanding and a $0.12 share price, Nexus has a market cap of $5.07M. That strikes me as a rock-bottom valuation for a company stacked with this much potential."
Bob Moriarty of 321 Gold wrote on January 11, 2019, in an article titled "Nexus Delivers Gold," the company "got approval for a new concession named Dakouli 2 in early November. The 100% owned Dakouli 2 property is contiguous with their Niangouela project that reported drill results of 26.69 g/t gold over 4.85 meters in March of 2017. If those numbers were for a project in the Golden Triangle, the stock would have tripled after the press release."
"Nexus has quality gold projects in one of the most attractive countries in Africa with 3-4 million ounce potential. The company is so far off the radar screens of investors that it hasn't even arrived at the airport. I don't think the company is going up tenfold in the next month but if management can run a tight ship and plank the money into the ground, it has ten-bagger potential over the next year or so," Moriarty added.
[NLINSERT]Disclosure:
1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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Additional disclosures:
Bob Moriarty, 321 Gold: Nexus is an advertiser. I have bought a fair number of shares in the open market. I am biased. They have a lot of information on their site and you should look at it. Do your own due diligence.
Equity.Guru: Nexus Gold is an Equity Guru client. Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.
