NuLegacy seeks ‘home run’ in its 2017 exploration program

After a year of attracting new shareholders and funds, NuLegacy Gold (TSXV: NUG; US-OTC: NULGF) is set to start its 2017 exploration program at the Red Hill gold project in Nevada’s prolific Cortez gold trend.

NuLegacy’s CEO James Anderson, who describes 2016 as a “transformational year” for the company, says that this year he looks forward to “exploration and drilling success.”

Last March, NuLegacy consolidated its interest in Red Hill, after Barrick Gold (TSX: ABX; NYSE: ABX) converted its 30% minority interest in the project into 32 million NuLegacy shares.

Barrick, which owns 11.1% of NuLegacy, produces gold at its 21 million oz. Pipeline and 15 million oz. Cortez Hills deposits on the Cortez trend. It also owns the nearby 10 million oz. Goldrush project, where mine construction should start in 2020.

After the consolidation, NuLegacy attracted two new shareholders: OceanaGold (TSX: OGC) and New York-based Tocqueville Gold Fund in April. OceanaGold bought 47.5 million NuLegacy shares at 14¢ apiece in a $6.7-million private placement. In return, it became the junior’s largest shareholder at 19.9%.

Tocqueville first acquired 19.5 million NuLegacy shares at 20¢ apiece in an open market transaction. It later bought another 9.2 million shares as part of a $4.5-million financing in October, bringing its total interest in NuLegacy to 9.9%.

NuLegacy Gold COO Roger Steininger (second from left) points out drill targets while visitors and colleagues look on at the Red Hill gold project in Nevada’s Cortez trend. Photo by Ian Bickis.

NuLegacy kicked off a 10,000-metre program last May to drill the Iceberg deposit and test other Carlin-type gold systems on the property, including the Avocado, VIO and Jasperoid basin gold anomalies. In September, it confirmed Avocado as its second Carlin-type gold deposit, after the Iceberg discovery in 2012. The discovery hole returned 200 metres of 0.26 gram gold per tonne, including 10- and 13-metre intervals of better than 1-gram material. (NuLegacy drilled four holes at Avocado, where three hit mineralization.)

“We are quite proud of the fact that we got a lot of things accomplished last year. Financially, we are in a much better position than the company has ever been in,” Anderson says.

NuLegacy, which closed a $6.1-million financing last July, ended 2016 with $16 million (US$12 million). It plans to start a 40-hole, 10,500-metre exploration program in April 2017.

Half of the 40 holes will go towards deeper drilling at the Avocado deposit and the Deep Iceberg, VIO and Jasperoid basin anomalies, while the rest will extend the near-surface gold mineralization at Iceberg, Anderson says. Iceberg has a conceptual 90- to 110-million-tonne exploration target grading 0.9 to 1.1 grams gold per tonne.

NuLegacy has budgeted US$3.2 million for the 2017 program, where 65% of the budget will go towards deeper drilling at Avocado and the anomalies, and 35% for shallow drilling in and around Iceberg.

The goals of the program include expanding the Iceberg and Avocado deposits, and confirming opportunities. Anderson notes the company’s board has already approved another US$500,000 for drilling if NuLegacy makes a discovery.

NuLegacy plans to drill three 500-metre holes at Avocado, followed by two holes in Iceberg and two at Avocado.

Asked if the company intends to calculate a resource estimate at Iceberg, Anderson replies that NuLegacy will add ounces, but that the company’s major shareholders, “the folks who have given us the money — they want us to find one of these giants,” he says, referring to Barrick’s large deposits in the trend.

“Elephant-sized deposits [are] the goal. That is why we have been given the mandate and the geological brain trust to step out and drill some of these high-impact targets. It’s the home run that people are looking for.”

NuLegacy closed March 20 at 28.5¢, within a 52-week range of 11.5¢ to 54¢.