Newcore Gold (NCAU) - New PEA Due Q2/21 & 58,000m Drilling Underway

Gold explorer Newcore Gold is advancing their 100% owned Enchi Gold project in southwest Ghana. A district-scale exploration project with a 1.2Moz inferred resource, the team are currently working on a 58,000m drill program.

We met with Luke Alexander, President & CEO of Newcore Gold to discuss the company, the Enchi Gold project and the opportunities that lie ahead.

Company Overview 

Newcore Gold's Enchi Project in Ghana is a district-scale exploration project with over 1.2Moz inferred resource. The project is on the Sefwi-Bibiani Belt, with neighbours such as the Kinross with their Chirano mine to the north, Bibiani to the north of that, and then Ahafo - the belt is host to several large multi-million-ounce deposits. With the 58,000m drill program underway, the company are looking to test the extensions of their existing resource whilst also testing further potential exploration targets.

Extracting Value: Opportunity & Differentiation

The company relaunched as Newcore Gold in August 2020 to show the market their commitment to the Enchi Project in Ghana. Greg Smith came back in May as full-time VP Exploration and Doug Forster stepped up as Chairman. They raised significant capital to put towards the 58,000m drill programme which is more than has ever been drilled in the last 25-years on the project. The historical exploration at Enchi has helped to build their geological understanding whilst reducing the exploration risk. This helps to differentiate them from the many other greenfield projects.

Right Time, Right Place: Attracting Financing 

The Newcore Gold share price shot up to CAD$0.80-CAD$0.90 in the second half of 2020 and has settled to around CAD$0.60 today.  The market was bullish on Gold and with the high Gold price, the company hit the market and attracted finance at the right time.

The Enchi project was an opportunity that had been completely overlooked by the market. It was trading as a shell company but on closer inspection, the Enchi project was sitting on 1.1Moz of inferred resource at the time, with 95% in the oxide and transitional categories which ultimately lends itself to a low Capex heap-leach operation. The stock significantly re-rated once Newcore Gold got involved and they have now added further value from the drill programme.  

Newcore Gold has been very successful at attracting capital, raising CAD$3M in May, which led to an 8,000m drill programme. An additional CAD$15M was raised in early November, giving them the opportunity to add another 50,000m of drilling. There is also capital to execute a PEA, as well as an updated resource at the end of the year. 

This capital allows the company to take a multi-pronged exploration approach as they continue to expand on the existing resource. They are stepping out along strike as well as drilling the gaps between the current resource pits. They are also going back to some areas that were previously drilled like Kwakyekrom and Kojina Hill which have historically had very good drill results. At Kwakyekrom for example, they've now put out 27 holes as part of their current 58,000m drill programme. They are also starting to drill at depth for the first time and have 2 diamond rigs drilling to put deeper holes under the project, down to around 250m- 350m.

The Greenstone hosted deposits at Bibiani and Ahafo to the north have grown in size once drilled at depth and typically there has been an increase in grade. The capital that Newcore Gold has raised has given them the funds to drill deep whilst continuing to expand the ounces at surface.

Business Model & End Goal 

The current focus for Newcore Gold is on exploration and the opportunity for scale. With 25 targets, the company is systematically approaching the exploration to de-risk the project and ultimately add ounces to create as much shareholder value as possible. This could start to attract the mid-caps and majors, with the addition of exploration upside too. 

Newcore Gold is currently updating the PEA which is due out in Q2/21 of this year. Heap-leaching is a potential, which would be manageable from a capital perspective, and could create significant value for shareholders.

Management's Holdings & Remuneration 

A number of the insiders and the Board have been putting money in alongside investors for the last 10-years. President & CEO Luke Alexander has put a large amount in to the company alongside other investors. With the recent raise, the team put more money in and have continued buying since, writing cheques alongside other investors, further aligning the team and shareholders.

The team has a lean G&A. As shareholders of the business, management wants to get as many metres into the ground as that is where the value lies. The Board are not paid a salary, instead they are remunerated with either options or PSUs. Luke believes that this is the way it should be for an exploration stage company. The Board are all significant shareholders so the share price should be the biggest motivating factor.

The Exploration Team

Greg Smith, the Vice President of Exploration, has over 35-years of exploration experience. He was running Calibre Mining up until the transformative acquisition with B2Gold, turning the company into a producer. Following that he joined the Newcore team. He has worked on the Enchi Project on and off for the past 10 years, and is very knowledgeable on the project.  He's also worked in these types of Greenstone hosted deposits all around the world, so he brings a lot of experience.

Another team member on the ground to highlight is Dan Wilson. Dan's worked on the Enchi Project on-and-off for the last 20 years. He worked with Red Back Mining back in the early 2000s and has worked all over Africa since. He joined the Newcore team in 2010 and has been with the Enchi Project ever since. 

OTCQX Listing 

Along with their TSX-V listing, Newcore are also listed on the OTCQX. They have a lot of interest from the US so the listing made sense, giving more investors a chance to invest. They have seen some good volume since the listing and have been pleased with the reaction in the market.

There is a real pace and energy to the team, they understand the market and are connected to money, now we wait the results of the drilling to prove up what they have in front of them. An exciting year for sure,

To find out more, go to Newcore Gold Website.