Newcore Gold (NCAU,NCAUF) - 90,000m Drill Program + 1.4Moz with PEA
Newcore Gold is a gold exploration company listed on the TSX Venture Exchange (TSX-V: NCAU) and also trades on the OTCQX® Best Market (OTCQX: NCAUF). The company's vision entails building a world-class, responsible gold enterprise providing exceptional returns to the shareholders through building asset value. The company's flagship project is the Enchi Gold Project located in Ghana (West Africa).
President, CEO and Director Luke Alexander has extensive experience in the resource sector. He is credited for raising billions of dollars and structuring deals for major mining companies while also advising some of the world's top institutional investment funds. Throughout his investment banking career, Luke has helped fund several major resource projects in West Africa. He is the founder of Park Road Capital, a Vancouver-based natural resource-focused consulting company.
Newcore Gold (formerly known as Pinecrest Resources) is a gold exploration company founded in 2014 based out of Vancouver, Canada. The company's team has a strong track record in management, acquiring assets, raising capital, and making well-informed decisions leading to successful deals. The company's vision is to build a responsive, creative and powerful gold enterprise that maximizes return for shareholders. The company's team includes some of the industry's most successful entrepreneurs. The company is focused on advancing its wholly-owned Enchi Gold Project in Ghana. This project has over a million ounces of inferred resource and is situated along one of West Africa's most prolific and developed gold trends.
Newcore Gold is advancing the Enchi Project in Ghana. This project is in the advanced exploration stage with a 1.4Moz current Inferred resource. It features robust economics, with an updated PEA released in June 2021.
Newcore Gold has a C$60M current market cap. The company raised C$11.5M in capital in early August 2021 which enabled the company to increase their 66,000m drill program to 90,000m. This financing included a new investor, Franklin Templeton who now own ~8% of Newcore Gold.
The company is well-supported by its institutional shareholder base and has observed an increase in institutional ownership from 32% to 40% through financing in the last year. The company's investors recognize the district-scale exploration potential for the Enchi Project and are focused on a long-term strategy.
Newcore Gold's PEA and resource update were released in June 2021. This included data from 20,000m of the current 90,000m drill program. The remaining 70,000m of drilling is expected to be completed over the next few months.
To date, the company has released data on ~63,000m of drilling, of which ~43,000 are additional drilled meters that were not included in the resource and updated PEA. The remaining ~27,000m of drilling will be completed and released over the course of the next several months. The goal for the ongoing drill program is to grow the overall resource size while also testing earlier stage targets to prove out the potential for additional resource areas on the Project.
The June 2021 PEA highlighted a US$212M post-tax NPV5% (Net Present Value) at a gold price of US$1,650. with approximately 1Moz of gold production over the life of mine, the after-tax IRR (Internal Rate of Return) stands at 42%. These metrics demonstrate that the company can grow the overall size of its resource and project while simultaneously improving the project economics.
The drill results demonstrate consistent high-grade results. The company's four deposit areas are all open along strike and to depth, with drilling continuing to step out and successfully extend the mineralized footprint of each of the deposit areas. The oxide-based reserves enable the company to highlight the potential for a less capital intensive heap leach project, as highlighted in the PEA.
Newcore Gold is also focused on deeper drilling. Previously, the deepest hole drilled by the company was at a depth of 150m. Based on the greenstone hosted deposits along the Sefwi-Bibani Belt located 50km north from the Enchi Gold project, it was observed that upon deeper drilling, Kinross's Chirano mine was able to grow the resource and grade at depth.
The company has commenced the identification of the underlying higher-grade feeder zones that are present across its deposits. As part of its ongoing drill program, Newcore is testing the deposits at depth.
Newcore Gold is also focusing on new areas which haven't been drilled. It has carried out soil sampling, trenching, and drilling at these deposits and is looking to make new discoveries. The company has identified 25 different targets across the project, with only 7 drill tested to date. Newcore plans to continue exploring these targets over time.
Newcore Gold isn't looking to add additional exploration for the Enchi Gold Project, as it would lead to dilution. However, the company is open to a production opportunity in a scenario where the investors are open to funding the program. However, it isn't actively pursuing these opportunities. The company is currently looking to generate shareholder value through aggressive drilling and exploration at Enchi.
2021 and Beyond
Newcore Gold is focused on efficiently drilling additional meters and delivering consistent results. The company speculates that the operations carried out in 2021 will lead to a bounce-back in its share price and outperform other similarly-sized companies in the market.
The company believes that if it can meaningfully raise the overall size of its resource, leading to increased market interest. For example, with drilling to date, Newcore has been successful in extending the mineralization at the Boin Gold deposit by 1.4km (to a total drill tested strike extent of 4.2km) on a 2.8km pit-constrained resource.
Newcore Gold is fully funded to carry out operations throughout 2022, this includes the 90,000m drill program along with a resource update. The company is open for a capital raise in the future in favor of drilling additional meters, however, this would be executed based on a constant evaluation of the overall business plan.
The company is looking to post drill results on a monthly basis and plans to publish an updated resource in mid-2022.