Nexus Minerals Ltd (ASX:NXM) now has a four hole, 1000 metre reverse drilling program underway at the Pinnacles JV Gold Project.
While Nexus may be just a junior explorer, its partner is mid-tier gold miner Saracen Gold Mines (ASX:SAR).
The drilling program is anticipated to be completed in early April, with results expected to be received by the end of April.
The Pinnacles JV provides Nexus with the opportunity for near-term gold production, as it has an Ore Sale & Purchase Agreement already in place with Saracen.
The current drilling program will follow-up on previous high-grade gold intersections, with the existing resource open in all directions.
Nexus Minerals is well-funded with $5.8 million in cash at the end of December 2015, and is also well placed to capitalise on opportunities as they emerge in the resource sector.
The program is to test for depth and strike extensions to the north of high grade mineralisation identified to date.
This will be both as a follow up to the widest and highest grade mineralisation intersected by Nexus in late 2015, and from previous drilling by Saracen.
Previous significant intercepts include: 6 metres at 4.4g/t gold; 13 metres at 4.6g/t gold; 2 metres at 10.7g/t gold; and 1 metre at 14.2g/t gold.
- Nexus earning up to 85% / SAR 15% JV Project Partner.
- Nexus minimum spend: Yr1-5 $200,000/yr to earn 85% interest (total A$1M).
- JV Expenditure dedicated to drilling & project development – no cash payments.
- Nexus can accelerate expenditure to “speed up” earn-in % time line.
- Project has existing JORC 2012 Resource of 28,000oz (from Surface to 130m).
- Underground High Grade Gold Mine Potential below Open Cut starter pit.
- Resource OPEN in ALL Directions - Opportunity to significantly expand resource.
- SAR to buy any Ore produced by way of Ore Sale & Purchase Agreement.
- SAR to process the Ore through their 2.4Mtpa Mill at Carosue Dam Mining Operations – 13km to the north of Pinnacles JV project.
- Nexus has full access to SAR Infrastructure, Haul Roads and Camp facilities.
Investors have provided strong support for the Nexus strategy, with shares in the company last trading at $0.105, or around double where they were six-months ago.
Even with the share price rise, the valuation of the company is only circa $7 million, yet it held $5.8 million in cash at the end of 2015.
Taking into consideration of costs during the March quarter, the Enterprise Value sits at $2 to $3 million.
Nexus is therefore leveraged to exploration success from the current drilling program.
Add to this the opportunity for near-term gold production via an Ore Sale & Purchase Agreement already in place with Saracen.
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