Transcript: Nova Minerals (NVA) - $20M In Bank & 50,000m Drilling to Come
Interview with Christopher Gerteisen, Exec. Director & CEO of Nova Minerals Ltd. Nova Minerals Limited, formerly Quantum Resources Limited, is engaged in mineral exploration.
The Company is an Australian explorer with projects in Western Australia and the Northern Territory prospective for gold and base metals. Its projects include Telfer Project and Tanami (Officer Hill JV) Project. The Company owns approximately 100% interest in the Telfer Project which consists of a single exploration license in an area of over six kilometers from the Telfer Gold mine.
- 2:05 - Company Overview
- 3:46 - Korbel Main Program Advancement: Drill Results, Indicated & Inferred Numbers, & Expectations
- 7:36 - Step-Out Program: Cash Position & Targets for 2021
- 16:01 - Skipping Stages: Comparables, Benefits, & Shareholder Support
- 20:14 - Aggressive Growth & Assurance of Success: What's Giving Them Confidence?
- 23:06 - The Future for Nova Minerals: Aims, Ambitions, Allocation of Rigs
Matthew Gordon: Chris, how are you?
Christopher Gerteisen: Good to see you, Matt. Thanks for having us again.
Matthew Gordon: Long time. October, and look at you. You’re a different man. Ladies, form a queue.
Christopher Gerteisen: This is summertime in Alaska. It’s the summertime image, right?
Matthew Gordon: You’ve been getting fit though. You’re an inspiration.
Christopher Gerteisen: The Keto diet. That’s the trick.
Matthew Gordon: The Keto. Gentlemen, that’s the way to go.
Christopher Gerteisen: Meat and veggies.
Matthew Gordon: Is it as simple as that? Meat and veg. That’s it?
Christopher Gerteisen: That’s pretty much it. Just cut the sugar and carbs.
Matthew Gordon: That means alcohol. Cut the alcohol.
Christopher Gerteisen: You can have a sneaky one in the back when nobody’s looking.
Matthew Gordon: I’m not sure I’m ready for that, Chris. Not sure I’m ready. Well look, we’d better talk about other things that we know something about. Mining, to be precise. Why don’t you kick off and give us that 1-minute overview? There is a bunch of new viewers since we last spoke in October. They'll be keen to hear this story, and then I’ll pick it up from there.
Christopher Gerteisen: Right, so the Estelle Gold project in the Tintina Gold Province in Alaska, one of the most prolific belts in recent times in terms of production and discoveries over 2Moz involved there. We’ve really been focusing on our Estelle Gold project. 324km square of claims. We’ve been focused on the Korbel Valley, the Korbel main deposit. To date, we have 4.7Moz in the resource, and that growth has just been second to none or certainly very rare. In 18-months, we’ve increased the resource by over 2Moz so at this rate, every 6-months we’re increasing the resource by about 1Moz. We’re progressing now to the Scoping Study, which will be released in July, and we’ll come out with another resource update later on this year on Korbel Main, as well as the next cab off the rank at the Estelle Gold Project will be the RPM prospect, which sits 20 miles along mineralised strike to the south, drilling will commence there in the coming weeks, and a maiden resource on that. That’ll add serious depth to the project. Now as we move forward, we’ll have 2 deposits that we’ll be expanding the resources on.
Matthew Gordon: Fantastic, okay, great summary. There are a few moving parts there. Estelle Gold camp, as it says behind you, is what we’re going to be talking about today. Thompson Brothers Lithium project, you’re spinning that out or in the process of spinning that out, which I think is good news. We’ve talked about that on a few occasions in the past too. Let’s talk Gold. The Gold market has come off a little- well, it’s actually recovered in the last couple of weeks a little bit, but it had come off. Your chart I think looks like many other Gold producers. You were at $0.19 when we spoke in October, $0.14 today. You’ve been busy, though. It’s not like you haven’t been busy. Do you mind if we talk about some of the specifics of what you’ve been up to? Estelle is the district as it were. Can we talk about Korbel Main? What have you been doing there? You’ve got 4.7Moz. Is that inferred?
Christopher Gerteisen: It is inferred. It is inferred right now. I’ll tell you why. We’re always striving to get to that indicated category and prove these resources out. Our drilling to date has been off drill pads, so we have these radiating drill holes coming up with drill pads. When we modelled the resource, we did get some indicated or I should say data density around those drill pods, like little balls around the drill pods. But you don’t mine it like that. When the resource models were modelling it, you have to have continuous zones. What we’ve done there is we’ve decided to go with inferred again this year. Now as we move forward, the drilling that’s happening right now, we’re doing infill drilling on drill lines in between those drill pads, so now we’ll have continuous zones of high data density so the next resource that we plan to release later this year, the next resource update will have a significant portion, we believe, of indicated resources due to these infill drill lines. 1 drill rig will be committed to that infill drilling. The second drill rig will be committed to step-out drilling. Remember, this deposit remains wide open, particularly along strike. To the northwest, we’ll be continuing to drill the Isabella Block, which consists of block A and block B, which constitutes Korbel Main currently. Those eventually converged, which is Korbel Main. Isabella Block is just to the north. We feel that the whole deposit is continuous and so we’ll drill the Isabella Block to the northwest.
To the southeast is where we have that much higher grade, relatively starter pit zone, which is what we call it. That’s where you have the You Beauty Prospect, so step-out drilling will also occur to the southeast. That’s the second rig. The third diamond rig that we have onsite will be mobilised to the RPM prospect. Remember, across our 324km square claim block, we have 15 other known prospects at various stages of advancement. RPM prospect is the next cab off the rank there. At RPM, we have a historical drill hole, 120m at over 1g we need to follow up, plus we did rock chip sampling there at the end of last year, 9 to 10oz/t in those rock chip samples that we need to follow up. We’ve also identified a second zone: RPM South. So RPM and RPM South, we feel that those will join together at depth as we drill it. The rig there will be mobilised in the coming weeks, and we’ll start drilling RPM. 5,000m - 10,000m here in this phase 1 2021 drill program, and importantly, come out with a maiden resource on RPM later this year. Q4 later this year. That’ll add serious depth to the Estelle Gold project, opening up another deposit to advance another resource. Don’t even want to speculate how many million ounces might be in RPM but either way, it’ll add seriously to the total resource inventory of the Estelle Gold Project, making it world-class.
Matthew Gordon: Okay. I feel like I’m on one of those dating sites where you’re just talking at me. I’ve heard everything. That’s the whole story. I can sit back and relax now. How much cash have you got left?
Christopher Gerteisen: $20M.
Matthew Gordon: $20M, so you’ve got plenty of money for this. Let’s talk about the step-out program then. We’ve seen a few companies recently stepping out 10m and not really trying too hard to work out what they’ve got. What’s your goal? What have you been tasked with doing with regards to expanding the resource? Obviously, you want to bring in the M&I component here but what number are you searching for? How are you going about the step-out program?
Christopher Gerteisen: The Korbel Valley is where the Korbel Main deposit is. We’ve always done step-out on Korbel Main. The deposit remains wide open. Because we’ve mainly been focused on step-out in past years, that’s how we’ve expanded this resource a 1Moz every 6-months. As I mentioned before just briefly, we’re now focused on infill drilling to get those indicated resources, but it remains wide open. The Korbel Valley in its own right we believe is a 10Moz whopper, not uncommon in our neighbourhood. Remember, the Tintina Gold Province is known, Fort Knox, Victoria Gold, Pogo, Donlin Creek is a 40Moz deposit. This is what we’re onto here at Korbel. 10Moz is not uncommon in our neighbourhood. What we’ll be doing when we step-out is stepping out as I said the Isabella Block to the north, to the south, also within the Korbel Valley. Don’t forget, there’s the Cathedral Prospect. Cathedral, we did rock chip sampling there last year. Several ounces per tonne in rock chips. Cathedral has a very distinct colour anomaly. We believe this could be the centre, the feeder zone, the core of the Korbel Valley mineralised system so we’ll be planning some drilling in there, as well as throughout the Korbel Valley. There’s block C, block D. These are all geophysical anomalies. Remember the IP changeability was one of the most useful, the best targeting tool. These are all anomalies we have to follow up. The fourth rig we’ll be using this year is our RC rig, and through the summer season, that’ll be going through the Korbel Valley down there and just drilling in scout holes. These scout holes will then define targets, which the diamond rigs will follow up as we progress. Lots of activity, 3 rigs in the Korbel Valley this year. Our target, to answer your question, is 10Moz. Now, we hope with this next resource update coming out later this year, we hope to get significantly on the way to those 10Moz. That’s our objective, but also as I said the fourth rig will be down at RPM to add even more to the resource inventory.
Matthew Gordon: Again, that’s an inferred number. You’re going to have to do a few things for the marketplace there. In all seriousness, in terms of the step-out program, the infill program, and trying to move things through to measured and indicated, you must also have a target for yourself because measured and indicated is where it’s at with regards to what market expectations are. It’s also what you’re going to need to create value, and for Scoping Studies, and so forth. Talk me through again that program timing. How much effort are you putting in? How much cash are you deploying to that component?
Christopher Gerteisen: We’ll be drilling up to 50,000m this year. That’s what we’ll be doing. We hope and expect with our infill drilling program, a significant portion will be indicated by the end of this year. We’re targeting at least half of it. At least half of the resource will be indicated. 50% in the indicated by later this year, and that’s 50,000m of drilling and a significant portion of that on the infill drilling. That’ll shift into indicated. You’re right. Scoping Study, we recently released our flowsheet. I should focus on this a bit. We’ve always envisioned ourselves primarily as a bulk mineable heap leach operation similar to our peers Fort Knox, Dublin Gulch. Our test work has shown that the path for us isn’t necessarily primarily heap leach. You have to go where the test work leads you, where the maximum profit scenario leads you. We’re certainly still bulk mineable but it looks via our flowsheet that the best path for our start-up project right now is to go through a milling circuit. The reason for that is ore sorting. Ore sorting technology has come a long way. We’re able to utilise that. Proven technology, XRT laser type ore sorting, has just worked beautifully. It works beautifully on our deposit. The reason for that is our mineralisation is these very discreet veins with very distinct mineralogy, so the ore sorting just picks this out and upgrades our resource when we put it through the ore sorts by up to 10 times.
The test work that we used, the rocks that we put into the ore sorter, were 0.5g. They spit out 6g/t. Based on that, it looks like a milling circuit is the path forward, hence the flowsheet that we released, which will be a key component of the upcoming Scoping Study, to be released in July. Now, we’re going straight in with all this drilling, we’re going straight into the PFS. We’ll be drilling up to 50,000m this year and into the foreseeable future, nonstop with these 4 drill rigs. The test work has already commenced for that PFS level of test work coming up. Remember, PFS 2022, 2023, 2024, 2025, Feasibility Studies. By 2025, 2026, the decision to mine; we’d like to be digging up the first dirt and first Gold core by 2025, 2026. An ambitious plan certainly but at this rate, we believe we’ll get there. The other thing that we’ve done on this path is our environmental permitting. Environmental baseline monitoring, some of these long lead time items like fisheries, fish studies, wetlands, hydrology, these are commencing now. They’re putting out the monitoring stations as we speak so that’ll be 12 to 18-months’ worth of data that you require on that and that’ll commence this year. We’re well on the path and that’s the key component to the permitting of course. We also believe that because we’re in the area we are, high in the Korbel Valley, that our impact on wetlands will be minimal. Why that’s key is that we will potentially, and it’s yet to be seen, we will be able to permit the project with an EA, rather than a full-blown EIS. The EA process is much more streamlined, fewer resources and less time required to get that type of permit.
That’s why we’ve started our environmental baseline studies now, to be able to determine that as quickly as possible. The other key component is the West Susitna Access Road. The West Susitna Access Road takes us from Port Mackenzie, which is right there at anchorage, ties us into the major rail and port system, and the terminus about 100 miles comes out, the terminus will be at the Estelle Gold Project. Very key. We’ve already completed phase 2 studies. Phase 3 will commence this year. That is the last phase of studies to be completed before we submit that project for EIS next year. Remember, we’re only one of many beneficiaries on that West Susitna Access Road. There are a number of other resource projects as well as the Mat-Su Borough here, which is very keen to get that project to open up farmland, land sales, fire control, recreational access. The State is also very keen to do that. This is part of the roads to resource project, a major push by the current government in the state of Alaska. We have many partners on that project and that is on track to come online, similar to our decision to mine and to be digging Gold. Very key. Everything is falling into place to meet our timeline.
Matthew Gordon: Has anyone else skipped the EIS and gone straight to an EA?
Christopher Gerteisen: There are some, yes. The major factor here is how much wetland you impact.
Matthew Gordon: Who’s done it?
Christopher Gerteisen: We have some tier 1 environmental consultants up here, the Jade North Group and they’ve advised us that the main factor there is the wetlands, and the Army Corps of Engineers basically looks at that and if your impact on wetlands is minimal then you can just do the EA process. That’s why we’re doing the wetlands mapping this year, this summer, to be able to determine that. What that means is basically you’re permitting - very little permitting then if you do an EA requires federal permitting. It’s mainly the state, and the state is much more streamlined to permit. Remember, we’re all on state land so we have no federal land of native corporation land within our claims. That’s another plus in terms of the permitting for us.
Matthew Gordon: Do the people who you raised $21M from know that you’re going to skip a stage and go straight to PFS? Are they happy with that? Would they fund you if you went back and asked them for more money if you’re streamlining your process?
Christopher Gerteisen: That group and many others are available to us at the right time as required.
Matthew Gordon: So, they approved your process of skipping straight to the PFS?
Christopher Gerteisen: Correct.
Matthew Gordon: Right, okay. That’s interesting. What does that mean for you in terms of time-saving and cost-saving?
Christopher Gerteisen: It means we can meet our objectives. We’ve really spent money wisely. Remember, our current cost per ounce for discovery is still less than $5. About $3oz - $4oz to date. Even after this year, our projections, our cost per discovery ounce will be less than $5. This is just an exceptional result. Anything less than $10 in the industry is just phenomenal. We’re well on track with that. We committed early on to be a year-round operation. What that means is we have a permanent camp, permanent infrastructure, everything onsite is a permanent operation. That’s paying dividends now in terms of cost per ounce. We’re drilling. Our drilling cost is about AUS$230 per metre. Compare that to the benchmark, Kalgoorlie, where the average is $190/m. Nobody else in Alaska is doing that. The reason for that is our early commitment to commit the capital to establish ourselves as a year-round operation. It’s only getting better out there. We’ll be expanding the camp this year. It’ll be a 50-man camp after this year. We’ll have an onsite prep lab. That is finalising construction as we speak. What that means is instead of sending off these bulk samples, 30lb, 10kg off-site, we’ll be prepping those and splitting those down onsite, to be sending 250g onsite. Totally bypassing the commercial prep lab and sending them straight to the commercial analytical lab. Major savings on freight costs and major improvements in the turnaround times. Commercial labs were absolutely dismal last year in terms of turnaround times if you recall. Some of our turnarounds were over 4-months to get assays back so we’ll be alleviating those problems now by doing that early-stage prep, bringing those weights down and straight to analysis. We’ve been drilling of course as we speak and so the first results we expect from that drilling to be coming out here in early June. Turnaround times are already improving. Those first results from the infill drilling and some of that step-out work to the southeast, those first results will be coming in early June. Prepare for that in the news flow. Also, prepare for a start-up of drilling at RPM.
Matthew Gordon: Okay, can I just ask though - when people skip stages, sometimes investors get nervous. What was the information that gave you the ability to make the decision to go straight to the PFS? Was it just that you have the money to do a tonne of drilling and therefore you thought you’d have enough information to be able to feed into a PFS, or is there something else? You’ve talked about how you’re laying out an all-year-round camp, I guess that’s contributory, but what was there at the beginning when you made that decision? You guys had a chat and went, ‘Do you know what? I think we can be unconventional. We’ll skip a stage.’
Christopher Gerteisen: One of our missions as a company is aggressive growth. Exactly that. We drill nonstop. We’ve been drilling nonstop since last year. We have 4 rigs on site now. Our drilling will be continuous. I said up to 50,000m this year. That’s not an end to it, we’ll just continue into the foreseeable future. We have the cash to do that and we’re not really skipping a step, we’re having a Scoping Study. Internally, our projections are yes, you’ve seen the flowsheet, this is a viable project, and we will release that to market in a formal format come this Scoping Study. It’s a natural progression for us, especially with the results from the ore sorting and the flowsheet is showing that a PFS is certainly the next step.
Matthew Gordon: But do you know what I mean, Chris?
Christopher Gerteisen: It’s what we said we would do. We have the financial backers and the backing.
Matthew Gordon: I know, but that’s what I’m getting at. Is it the confidence around the financial backing that’s allowing you to think like that? Because you know what I mean, most companies do a PEA, right? Put it out to market, see what the reaction is, and move to the next step.
Christopher Gerteisen: We consider the Scoping Study to be a PEA-lite. We plan to follow it up with another resource right afterwards, later this year. The next resource will follow that Scoping Study. What we want to show and project to the market is that this is viable, and that’s what the Scoping Study will show. It’ll show that it’s viable. That’s what we expect it to show.
Matthew Gordon: So is it PEA-lite or Scoping Study-heavy? Is that what you want us to think?
Christopher Gerteisen: Well, we just call it a Scoping Study. Certainly, it’s based on inferred resources but very shortly thereafter we will confirm and show that a significant portion is indicated resource. That’s our plan. That’s what we’ll be doing.
Matthew Gordon: It’s very aggressive, you’ve got the capital to do it, you’re working all year round and you’re aiming to deliver 10Moz of inferred, and upgrade to the indicated category as well. Okay?
Christopher Gerteisen: Correct.
Matthew Gordon: Wow. That’s good.
Christopher Gerteisen: 4 rigs, Matthew, drilling nonstop 24/7.
Matthew Gordon: 3 diamond, 1 RC. I got it.
Christopher Gerteisen: And the production rates now are warming up. They’ve just been great. We’ve been drilling with 2 rigs at Korbel. They’ve been doing 180m - 200m a day. It’s just been really good.
Matthew Gordon: It’s that why there’s no fourth rig or fifth rig, diamond that is because you’ve got the resource and there’s no point in going crazy here? How do you plan how many rigs you allocate?
Christopher Gerteisen: We have 4 rigs on site, let’s get those going first. Rigs are hard to come by right now, by the way. We’ve spoken to our drilling contractor and if we want another rig, especially now in the summer season, that could be weeks or months out. Certainly, we’re a very aggressive customer and they’d like to give us a rig. They would if we requested it. Let’s get these 4 rigs going first and then we’ll look to the future.
Matthew Gordon: Brilliant. Good update, Chris. Stay in touch. It sounds like there’s a lot coming through. You’re certainly talking about delivering a lot for the rest of this year so stay in touch and let us know how you get on, okay?
Christopher Gerteisen: Absolutely, thanks for having us again and I look forward to the next update, Matt.