On Dec 16th 2011, Nevada Exploration Inc (TSXV: NGE) announced that it has signed a Letter of Intent with Baymount Incorporated (TSXV: BYM) to explore NGE’s Fletcher Junction project. While this deal has to move from a Letter of Intent stage to a formal agreement and need to win approval from Baymount’s shareholders and regulators, it does indicate the strong interest in the Fletcher Junction project and the underlying potential in this highly prospective project. The finding and development of the Fletcher Junction project is a very good example of what NGE can achieve using its ground water chemistry exploration technology and why investors should pay attention to this rather unique gold junior.
To learn more about NGE, download research reports and see the CEO video interview please visit their investor information hub HERE.
The Fletcher Junction Project is located just 6 km (4 miles) north of the Aurora mining district owned by Great Basin Gold Limited (TSX: ABG) (NYSE Amex:GBG) (combined past production and resource: 2,000,000 oz Au, 2,400,000 oz Ag). 13 km (8 miles) south-southwest of the Fletcher Junction is the Borealis mining district being developed by Sage Gold, Inc.(TSXV:SGX) and Golden Gryphon Corp (TSX:GGN) (past production 1,000,000 oz Au, 5,000,000 oz Ag).
The Fletcher Junction project is comprised of a sizable land area of 970 hectares (3.7 square miles) in Mineral County, Nevada, within the Walker Lane mineral belt of southwest Nevada, approximately 30 km (19 miles) southwest of Hawthorne, Nevada. To date NGE has spent over a million dollars on the property. Because the land is covered by sand and gravel, NGE used its ground water chemistry exploration technology to find highly prospective ground not identifiable by conventional exploration with similar geological characteristics like the neighbouring Aurora mining district. Since NGE is staking claims to land which is not sought after (as no other mining company has this technology) it is able to acquire these projects for very low cost.
NGE then followed up with a Phase I drilling program in Fletcher Junction in 2008 and intersected hydrothermally altered and geochemically anomalous bedrock similar in size, alteration-style, and trace element chemistry to the nearby Aurora mining district, which produced nearly 2,000,000 total ounces of gold and 2,400,000 ounces of silver. These drill results, while not impressive to a conventional mainstream investor, are quite impressive to professionals in the industry as they show that NGE was able to obtain highly relevant clues that the geology of this project is similar to the neighbouring mining district.
NGE is using its technology to identify land which was previously unexplored (as it is not possible using conventional techniques) and has found that beneath the sand and gravel the bedrock displays similar characteristics as the neighbouring prolific Aurora mining district. Of course there needs to be a follow up drilling to the phase 1 program to definitively prove the resource potential. But NGE did something remarkable. They identified a undeveloped land using their technology, did the initial exploration work to prove there is favourable bedrock beneath the covered sand and gravel and managed to attract other miners who will now put their own capital to continue the exploration program. So for NGE shareholders significant value was created with minimal investment using their ground water chemistry technology.
NGE has developed proprietary hydro geochemistry (groundwater chemistry) exploration technology to explore for gold in Nevada’s covered basins where traditional exploration techniques are challenged. NGE works as a project generator in which it identifies exploration targets using groundwater chemistry and then applies a staged exploration program to delineate and test prospective drill targets. NGE’s risk managed exploration program is designed to test targets quickly. Once NGE has demonstrated that a property exhibits gold mineralization, the company works to partner with well-funded and technically competent groups to move the property through the further stages of development. Apart from working on developing its own properties, NGE also uses its technology to identify and discover gold in other’s properties for a fee and royalty interest.
This innovative and less risky business model allows Nevada Exploration Inc (TSXV: NGE) to generate revenue and royalty interest by deploying its intellectual knowledge in its partners properties while also developing its own projects in joint venture partnerships with other miners who put up capital and earn their interest in NGE’s properties. NGE has a joint venture agreement on the Awakening project with AuRico Gold Inc (TSX: AUQ) (NYSE: AUQ).
This new announcement of a Letter of Intent for a possible joint venture on the Fletcher Junction project gives Ubika Research more confidence that NGE technology is gaining traction among mining companies. Since NGE has many more projects available for joint venture, this announcement can help NGE in attracting other potential Joint Venture partners.
Disclosure
Ubika Research has received compensation from Nevada Exploration Inc for providing analyst research coverage.
Except for the historical information presented herein, matters discussed in this document contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements.
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