Nevada's New Gold Rush

The town of Beatty, Nev., is famous for two things: Its rich mining history, and the Death Valley Nut & Candy Co.

Ladies and gentlemen, I have come to tell you about something rich. And I am all out of candy.

Indeed, there is a gold rush going on in Nevada right now. And it’s happening right outside Beatty. 

In my latest trip to the Nevada, I never got to the Death Valley Nut & Candy Co. That will disappoint my dentist. But I did tour an excellent project owned by Northern Empire Resources (TSX-V: NM) (OTC Pink: PSPGF).

This companyowns the past-producing, fully permitted Sterling gold mine. Importantly, it also owns nearby projects with plenty of “blue sky” potential.

I’d made a connection with Northern Empire during a recent trip to Vancouver, at the Metals Investor Forum.

CEO Mike Allen gave me the scoop on his company. You can watch our video interview from Vancouver here: https://youtu.be/QoS3rpYrDo8

The company intrigued me enough that I joined Mike, Northern Empire’s executive chairman Douglas Hurst, and a team of geologists and analysts as we visited the Sterling Mine. We also went to see the company’s satellite projects. Some are past-producing mines, Daisy and Secret Pass. Others are brand-new discoveries, like SNA.

It’s only when you put boots on the ground do you realize how advanced Sterling is. It is fully permitted. It has a completely intact mill that was installed some years back but looks brand-new. Mr. Hurst told me that if someone put Sterling into production, they’d have cash flow in about seven months.

But I came to the conclusion that no one would buy Northern Empire for the Sterling Mine. Not alone.

The Sterling is high-grade, and it could have perhaps 20% to 30% upside on its resource, if the drilling they are doing now pans out. But what would really interest another company is all the potential “blue sky” on the satellite deposits.

Northern Empire has an inferred mineral resource of 709,000 ounces, grading 2.23 grams of gold per ton at four deposits. Drills are going into those satellite deposits right now. And they keep coming up with rich results.

And that means that Northern Empire’s properties could contain a lot more gold than is presently known. And I think THAT’S what would interest other companies.

Now, why am I fixated on what other companies think of Northern Empire? Because that’s what the board of Northern Empire does — it’s a team of men who have successfully built projects and sold them to other companies. And that is their model for this company, too.

Doug Hurst was a founder and director of International Royalty Corp. That company was sold to Royal Gold for $700 million. He was also a founder of Newmarket Gold, which went to Kirkland Lake Gold in a $1 billion deal.

Adrien Fleming, another director, was part of the group that sold Underworld Resources to Kinross Gold for $138 million.

Another director, John Robbins, was part of the team that sold Kaminak Gold to Goldcorp for $520 million and Grayd Resources to Agnico Eagle for $275 million.

I could go on. The board is chock-full of guys with past success.

While I was on the tour, I did another brief interview with CEO Mike Allen at the Secret Pass pit. Remember how our last video made us look like giants? This time, the sun was in my eyes, so I look like a blind man. Sigh. Anyway, here it is …

Direct link: https://youtu.be/SGNrQu9BNic

Now, here’s where things get interesting. Let me show you this picture of the old Motherlode Mine, which was purchased by Corvus Gold (OTCQX: CORVF) (TSX: KOR). They’re doing drilling as well … and getting some rich results. Its drills recently turned up 70 meters at 1.45 grams of gold per metric ton, AND expanded the size of the Motherlode deposit.

I’ve circled a drill rig in front of the Motherlode pit. That rig belongs to Northern Empire. I’ve also circled a rig on the far side of the pit. That belongs to Corvus. In fact, Corvus’ Motherlode target is completely surrounded by Northern Empire territory.

And if you went further off in the desert, you would find AngloGold Ashanti (NYSE: AU) doing some drilling as well, on another gold project. And there’s a project over the hill being explored by a private-equity company.

And guess what? There are a lot more companies doing great work in Nevada.

The fact is, Nevada is rich is precious metals. That’s why they call it “The Silver State.” This particular part of Nevada seems to be rich in gold, not silver.

But it’s also a mining-friendly state. And that is so important nowadays. From the Democratic Republic of Congo to Indonesia to the Philippines to places closer to home, there are some locales that are getting greedy and grabby. Others that give miners the cold shoulder.

Related Story: Bungle in the Jungle

Nevada is not only rich in resources, it’s also friendly and easy to work with. And that counts for a lot these days.

I’ll be going back to Nevada soon. There are a lot more great companies to find. Do your own due diligence before you buy anything. But definitely start looking.

All the best,
Sean Brodrick

About the Editor

Widely known as the Indiana Jones of natural resources, Sean has sifted through terabytes of data and traveled tens of thousands of miles in search of companies that can make a transformative difference in the lives of investors. With his boots-on-the-ground experience, he visits mines, meets executives in person, discovers hidden opportunities and reveals pitfalls that investors should avoid.

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