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Nighthawk Gold Corp (TSE:NHK) High-Grade Gold Deposits at Colomac Gold Project

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Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.

Nighthawk Gold Corp (TSE:NHK) (OTCMKTS:MIMZF) (FRA:M2M1) is a gold exploration company with operations in the Northwest Territories. CEO Dr. Michael Byron provides details of the historic drilling at Nighthawk’s 100-percent owned Indin Lake Gold Property. This property contains 2.6 million ounces of gold and includes Nighthawk’s flagship enterprise, the Colomac Gold Project. Colomac is a large mineralized system, with high-grade deposits. The company drilled 32,000 metres last year and has a 25,000 metre drill program for 2019. Dr. Byron explains that Nighthawk plans to drill 70 to 80 holes, of which 50 percent will be at Colomac and the remainder will be at satellite properties. Dr. Byron expects early results from the 2019 drill program by May, with continuous news flow during the rest of the program.

Transcript:

Ed Milewski:  Today we have Dr. Michael Byron. He’s the CEO of Nighthawk Gold Corp., ticker NHK. How are you doing, Michael?

Dr. Michael Byron: I’m doing well, thank you.

Ed Milewski:  Good, good. So you’re a junior gold explorer, and your focus is the Northwest Territories, and tell me about your land position? Like, I understand you have a sizeable land position?

Dr. Michael Byron: Yeah. We’ve got a regional play centred around a former producer, the old Colomac Gold Mine.

Ed Milewski:  Okay.

Dr. Michael Byron: So we’ve gone in in early 2010 and consolidated pretty much the entire gold camp. So in terms of surface area, it’s about 900 square kilometres. We’re located about 200 kilometres north of Yellowknife.

Ed Milewski:  So, a bit chilly at night?

Dr. Michael Byron: Well, yeah, if you’re up there in the winter, it’s a lot more than chilly.

Ed Milewski:  So when was the last time gold was produced there?

Dr. Michael Byron: 1997, the asset was actually shut down. The former owners, Royal Oak, went bankrupt, and that core deposit then became the responsibility of the Federal Government of Canada to clean it up.

So when we came along, we saw a residual opportunity, and worked on that over the subsequent years, and have moved the asset now to over 2.6 million ounces.

Ed Milewski:  So that’s a 43-101?

Dr. Michael Byron: That’s correct.

Ed Milewski:  2.6. I remember the late 90s, because I was thinking about speculating, because gold just kept dropping and dropping, and you know, it put in a bottom I think in ’99 and then it did a double bottom in 2001; it was a brutal time. So I could see why maybe a project like this might have trouble.

Dr. Michael Byron: Yeah. I think gold at that time was about 650 an ounce.

Ed Milewski:  And on its way down to 250, too.

Dr. Michael Byron: Yeah. So it wasn’t a great time to be a producer of a small deposit, but you know, with the rebound – and we’ve actually found more opportunity in that asset than Royal Oak thought it had, in terms of a much higher grade opportunity.

Ed Milewski:  Was that Peggy Witte?

Dr. Michael Byron: Yes, yes.

Ed Milewski:  So, 2.6 million ounces, and how much of the sort of prospective land would you say you’ve explored?

Dr. Michael Byron: Oh, geez. About half of the sill itself, but in the regional land package, even less than that. So we consolidated an entire Archean gold camp. So think about it as, same sort of geology as the Abitibi Greenstone Belt, which hosts all our historic mining camps like Timmins and…

Ed Milewski:  Right. Are there any other credits, or is it mainly gold?

Dr. Michael Byron: It’s mainly gold, yes.

Ed Milewski:  Okay. So – and tell me, now, you have about 190 million shares outstanding. How much cash are you sitting on?

Dr. Michael Byron: A little bit over $14 million in cash.

Ed Milewski:  And when did you do your last funding?

Dr. Michael Byron: Last year, actually. We did a top-up of flow-through, just to take us, because we initially came out, we were going to drill 25,000 metres, and we actually moved it up to 32,500 metres.

Ed Milewski:  So you drilled, this was last year you drilled 32,000, and then you’re going to start another 25,000 metres this year?

Dr. Michael Byron: That’s correct, yeah.

Ed Milewski:  And what price did you do the funding at last year?

Dr. Michael Byron: $0.50.

Ed Milewski:  Fifty cents, okay. It’s been a tough market for, you know, the junior market has been difficult, I would say, generally speaking. There’s been flashes of brilliance, of course, but…so, so, now what is the – let’s talk about the grade. What kind of grade are you -?

Dr. Michael Byron: Well, traditionally, or historically, Colomac was a large tonnage, low-grade open pit deposit of which they mined about 500,000 ounces. So it was hardly touched. What we’ve been able to do is go back in and build upon what was left, and increased it to where we are today at a little over 2.6, with only exploring half of the sill. So you know, there’s an upside of 4 to 5 to 6 million ounces there. At 1.62 is the global grade, but we also found high-grade domains in the system, and those grades go significantly higher, up to 4, 5, 6 grams.

So what we’re trying to do is move that forward so that we can reinvent Colomac as a large-tonnage, low-grade opportunity, but also as a higher grade opportunity where we may be able to get deeper into the system by ramping it into these high grade domains.

Ed Milewski:  Right, right. And is there much infrastructure there from when they were producing?

Dr. Michael Byron: No, it was reclaimed by the Federal Government, so it was deemed reclaimed, but there was an airstrip that was left, a 5,000-foot airstrip. To put that into perspective, if you – we’ve landed Hercules on it before, so it’s a big strip.

Ed Milewski:  Right.

Dr. Michael Byron: We use that winter and summer to move equipment.

Ed Milewski:  Yeah. This is quite a significant project, isn’t it? Like, it’s not just like you’re looking for a couple of veins; you’ve got a big system, here.

Dr. Michael Byron: We have a big system at Colomac, but the system spans far beyond the boundaries of Colomac. When you think of an opportunity of this scale, where you’re talking about a deposit that may contain upwards of 6 million ounces, that requires a very robust system, and usually in the Archean, they manifest themselves over a broad aerial extent. And we’ve been successful in zeroing in on a lot of these satellite deposits that share a lot of similarities to Colomac, and that being in terms of high grade and width; but they’re all on surface. Nothing’s been drilled below 100 metres, so there’s your opportunity.

Ed Milewski:  So I was just going to ask you, how deep do you go in these holes? Like, you’re saying 100 metres?

Dr. Michael Byron: Well, outside of Colomac. Colomac’s been drilled down to 600 metres in the high-grade domains, but the rest of the sort of the near-surface environment, most of the drill holes are, you know, 200 to 300 metres.

Ed Milewski:  So when are the drills going to be turning here for Nighthawk this year?

Dr. Michael Byron: Next week. We begin the program.

Ed Milewski:  Really?

Dr. Michael Byron: Yeah.

Ed Milewski:  Yeah. So I thought maybe because of the – oh, so you’re not waiting till May or anything like that, you’re –

Dr. Michael Byron: No, we open the camp in late February, start drilling by the end of the first week of March. We’ve done that the past few years, and continue on till at least the end of September and possibly early October.

Ed Milewski:  And just a question: where do you think you have to get to for a major to come along and say, you know…would you need to get to, like, 3 or 4 million ounces?

Dr. Michael Byron: Yeah, traditionally it’s always been, you know, the litmus test has been 3 million ounces. And if you don’t have 3 million, you’ve got to have the real estate and the system that people can see three or better. And we’ve got that.

Ed Milewski:  You’ve got that, yeah. And do you have big shareholders? Do you have some big shareholders?

Dr. Michael Byron: We do. We have strategic shareholders as well as institutional. Strategics would be Kinross Gold, they own just under 10 percent; same with Osisko Royalties, and Northfield Capital owns about 17, 18 percent.

Ed Milewski:  Wow. So the float, when you’re talking 191 million shares or whatever, you back out these big shareholdings, the float shrinks down quite fast.

Dr. Michael Byron: Quite fast, yes.

Ed Milewski:  Yeah, yeah, yeah. So, how many holes do you plan on drilling here this year? It’s 25,000 metres, you’re looking at a couple hundred metres per average?

Dr. Michael Byron: Yeah, we’ll probably to 70 to 80 holes, you know, throughout, and that’s, like I said, about 50 percent of the holes will be drilled at Colomac to prep us for a resource update in early 2020, and the other 50 percent will be on our satellite properties that we’ve had great success with over the past year.

Ed Milewski:  Just out of curiosity, how many people will be at your camp?

Dr. Michael Byron: Well, upwards of 35, 40 people are there.

Ed Milewski:  So obviously –

Dr. Michael Byron: We’re in full bore. We’ll be working the drills, we have three drills onsite, so we’ll drill – those will be operational throughout the program, as well as we have prospecting and mapping teams active throughout the summer, as well.

Ed Milewski:  And when do you expect to have initial results from this program?

Dr. Michael Byron: Probably, if we start it in March, late May, probably, possibly early June.

Ed Milewski:  Okay. And then you’ll have continuous news flow?

Dr. Michael Byron: Continuous, every, say, two to three weeks.

Ed Milewski:  Okay. Is there anything you want to add?

Dr. Michael Byron: Well, basically, you know, think about this opportunity as getting a position in a junior that’s acquired a really, really robust asset at a bargain basement price right now, that strategics are already looking at and paying attention to what we’re doing.

Ed Milewski:  And quite frankly, gold has had, in Canadian dollars, for sure, a pretty good move. Like, you know, gold’s not at what I would call a bargain-basement price; it’s around $1,300 USD, which is, you know, close to, what? $1,600 CDN or something.

Dr. Michael Byron: Yeah. As the price of gold goes up, as you know, the value of those ounces increase as well, and then…so we’re really well positioned to take advantage of that.

Ed Milewski:  Yeah, for sure. Okay, well, let’s leave it there. Nighthawk Gold: Ticker NHK, drill results sometime late May.

Dr. Michael Byron: Correct.

Ed Milewski:  Thanks, Michael.

Dr. Michael Byron: Thank you.

Ed Milewski:  Glad to have you on the show.

Dr. Michael Byron: Pleasure.

Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.

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