Northern Empire's secret pass pit

Northern Empire – The Sterling Gold Project Site Visit

On April 6th, I had the opportunity to visit Northern Empire’s Sterling Gold Project, located north-west of Las Vegas, Nevada.  My visit was great and really gave me a good perspective of the Sterling Gold Project’s scale and its potential for further resource expansion.

In particular, the Crown Block stood out as having great exploration potential, as not only is this area a focus for Northern Empire, but also has drawn a lot of attention from Corvus Gold, whose Mother Lode Open Pit is completely surrounded by Northern Empire.

In all, I left the site visit very optimistic that Northern Empire’s 2018 drill program should shed a lot of light onto the Sterling Gold Project’s potential and am eagerly awaiting news flow!

Las Vegas

After landing in Vegas, I hopped in an Uber to get to my hotel. As this was my first visit to the area, I was mesmerized by the bright lights, massive celebrity advertisements and sheer size of the Las Vegas Strip.

View from the bridge connecting the Bellagio and Ballys

View from the bridge connecting the Bellagio and Ballys

Las Vegas truly is the center of the universe when it comes to marketing, because the corporations that reside here clearly understand human behaviour and how to manipulate it. Everything about the strip is designed to put a smile on your face while simultaneously extracting the maximum amount of money from your wallet.

Along the strip, a Starbuck’s tall Americano is $5.50 USD, a tall can (493ml) of domestic beer $10.00 USD, and a ‘big gulp’ slushy with rum or tequila will run you $30 USD. These prices remind me of those typically reserved for sporting events or concerts, which may be a good comparison for the confines of the Vegas Strip.

A view of New York New York from my hotel parking lot

A view of New York New York from my hotel parking lot

While my comments here may seem negative to some, they aren’t meant to be. I have a high regard for the marketing expertise that has created this ‘wonderland.’

View of the Bellagio

View of the Bellagio

Bottom-line, even if you aren’t a gambler, Las Vegas is a place that everyone should visit at some point in their lives. It truly is unique in terms of what it has to offer.

Sterling Gold Project

The day of the site visit started early, as we met in the lobby of the hotel at about 6:30 am. I, however, hadn’t adjusted to the 3 hour time change and was up some time before. One thing about starting your day at 4 am in Vegas is that you aren’t alone. That said, I’m sure most of the people I encountered at that time of the morning had yet to go to bed!

From our hotel, it was about a 2 hour drive up the I95 to the Sterling Gold Project. Given the size of our group, we split up into 3 vehicles. In the SUV with me was Executive Chairman, Doug Hurst, and The National Investor newsletter Editor/Publisher, Chris Temple. Both men are very experienced in the mining and investment worlds and shared several, great anecdotal stories about their experiences and lessons they’ve learned from the sector.

Drones and Area 51

Roughly half way to our destination, we drove past a U.S. Air Force base which, famously or infamously, is the site of at least a portion of the U.S. drone fleet.

drone

A drone flying in the Sterling Gold Project Vicinity

One of the most intriguing, yet mysterious, sites along the way was Area 51. Of course, you can’t actually see Area 51, but many of the businesses along the highway have names inspired by this mysterious U.S. Air Force base. I’m by no means an expert on the lore surrounding Area 51, but after spending the day at the Sterling Gold Project, you very quickly become aware of a U.S. military presence.

helicopter

2 (small) Helicopters in the distance

Walker Lane Trend

The Walker Lane Trend extends north-west from Las Vegas to Reno, running parallel to the Nevada and California state borders. While not as famous as the Carlin or Battle Mountain-Eureka Trends in the northern portion of the state, the Walker Lane Trend has a very rich gold mining history.

Walker Lane Trend

It’s estimated that 50 million ounces of gold have been discovered within the Walker Lane Trend, with the Comstock Lode Mine located near Reno being, arguably, the most famous.  Additionally, the Round Mountain and Bullfrog Mines are other examples of gold producing mines within the trend.

Interestingly, Barrick’s past producing 2.3 million ounce Bullfrog Open Pit Gold Mine can be seen from Northern Empire’s Crown Block. I was able to snap a photo, while standing at the top of the Secret Pass Open Pit – see below.

View from Northern Empire's Secret Pass Open Pit

View from the Secret Pass Open Pit – Barrick’s Bullfrog Mine

Crown Block - detachment fault

Satellite Image of the Crown Block

As you can see in the satellite image above, the Bullfrog Detachment Fault and the Fluorspar Canyon Detachment Fault run in a similar east-west fashion, and lay host to the past producing open pit mines. Also, the Faults divide the tertiary volcanic rocks in the north and the sedimentary rocks in the south.

Sterling Mine

The site visit began at Northern Empire’s permitted Sterling Mine, which is in the southern region of the property. After completing our site safety orientation and collecting our PPE, we hit the road, making our first stop at the heap leach pads.

Sterling’s Main Entrance Road, Looking Away from the Sterling Mine

Sterling’s Main Entrance Road, Looking away from the Sterling Mine

Sterling’s Main Entrance Road, Looking at the Sterling Mine

Sterling’s Main Entrance Road, Looking at the Sterling Mine

Currently, there’s one active leach pad; at the time of our visit, it was being turned over by the bulldozer featured in the photo below. The ore is mixed on the pad to help oxygenate the pile and break up any fluid channels that formed over the last cycle. Ultimately, this leads to higher recoveries in the processing plant. These are simple smart things that the Company does to improve efficiency show the respect that they treat shareholder capital. Also to note, the existing facilities and processing plant appear to be in great shape, which is a real plus when it comes time to begin production.

Active Leach Pad

Active Leach Pad

We then moved into the Sterling Mine open pit area, more specifically up onto the Water Tank Hill, which gives a great vantage point for viewing all three open pits.

CEO Mike Allen

Northern Empire CEO, Mike Allen, on Top of Water Tank Hill

While standing on Water Tank Hill, CEO, Mike Allen, took the opportunity to explain how they will attempt to expand the Sterling Mine resource. As explained in my introductory article, the company will follow up on recent high-grade drill holes that sit on the pit shell edge, as seen in the satellite photo below.

Sterling Mine aerial photoSterling Gold Project Mineralization – Core Shack

Core box

Next, we headed back to the main offices for lunch and a look at the core shack. As with all Carlin-Style gold, the core doesn’t possess any eye-catching visible flakes or nuggets, but instead it is the orange oxidized material (the more broken up the better) which should catch your eye, as it is gold bearing. The samples, however, were still very interesting as the fluorite and calcite mineralization found on the property can be seen in the core samples. In the photo below, for instance, the purple mineral is fluorite.

core sample with florite

Core Sample with Purple Mineral Fluorite

In fact, the Sterling property boundaries not only surround Corvus Gold’s Mother Lode Project, but also historic fluorite and mercury mines, which can be seen in the property map below.  Interestingly, it was mentioned during the visit that the fluorite mine was hampered by gold contamination, what a wonderful issue to have!

Sterling Gold Project - All mines

Sterling Gold Project

Sterling Mine Site Manager Chuck Stevens , who worked previously in the Sterling underground mine, showed me a few excellent calcite samples in his office and, additionally, pointed out the massive calcite sample sitting outside the geologist’s office trailer. Also, Executive Chairman, Doug Hurst, pointed out a couple of cinder cones which lie just east of the property; another example of the geological diversity of the property and its surrounding area. The immediate area around Northern Empire’s Sterling Project features fluorite, decorative rock, precious metals and marble mines demonstrating both the endowment of the area, the impact of mining on the local economy, and the ability to permit both large and small mines effectively.

Cinder Cone Edited

NOTE: A Cinder Cone is formed by volcanic eruptions of mafic / intermediate lavas, which collect to build a cone around a volcanic vent. On the east side of I95, on your way up to the Sterling Gold Project from Las Vegas, a cinder cone is currently being mined for decorative stone used in landscaping.

The Crown Block

Brian Leni

Yours truly with the Secret Pass Open Pit in the background

Heading back out onto the I95, we then headed north toward the town of Beatty, to the Crown Block.  As you will remember from my introductory article, the Crown Block is made up of 4 main targets: Daisy, Secret Pass, Shear Zone and SNA, all of which are located along the Fluorspar Canyon Detachment Fault.

Daisy

Our first two stops were at Daisy and Secret Pass deposits, where Senior Geologist, Ron Kieckbusch, and Exploration Manager, Rich Histed, discussed the geology of the area, the work they completed in 2017, and where they were headed in 2018.

Geology of Crown Block

South of the fluorspar detachment fault, mapping has defined an asymmetric fold-thrust belt in the sediment package, with a northwest vergence and northeast plunge likely of Mississippian age (327-290 Ma).

It’s my understanding that the folding of the sediment package generated perpendicular faults, which were later made larger during a caldera collapse. For those who aren’t familiar, a caldera is a large volcanic crater, which can be formed by either an explosive volcanic eruption or the collapse of surface rock into an empty magma chamber. The now larger faults become easier conduits for fluid flow, thus explaining the mineralizing event.

Geological Mapping and Geochemical Sampling

Currently, 30% of the 141 square-kilometer property package has been geologically mapped and geochemically sampled, with the Crown Block being the primary focus. Mapping and sampling is a very efficient and cheap way of acquiring drill targets. In total, 580 rock chip samples have been taken, returning grades within a range of undetectable to a high of 13.85 g/t gold, and 34 samples returned greater than a 1.0 g/t gold.

Crown Block new targets

As stated, the mapping and sampling within the Crown Block has identified new exploration targets, which were noted in the April 25th news release and can be found in the image above.

  1. Road Zone – located north of the Daisy Deposit and features several up-dip surface samples of greater than 1.0 g/t gold, which indicates potential for shallow mineralization.
  2. Gold Ace Fault – located south and up-dip of the Daisy Deposit and features a large undrilled area of high-grade surface samples, including a high of 13.85 g/t gold.
  3. Crowell Extension – located east of the Daisy Deposit and features reported gold grades of up to 7.0 g/t from the historic Crowell fluorite mine. The Crowell Extension target has a strike length of roughly 800 meters.
  4. Radio Tower – Anomalous surface geochemistry to the south of the Secret Pass pit indicate a possible target at depth.
  5. Secret Pass East – As the name suggests, this target lays on the under-explored eastern portion of the large Secret Pass Deposit. Surface sampling has returned up to 5.0 g/t gold and represents a potential strike length of roughly 1200 meters.
  6. Ronko Jasperoids – Located south of the SNA, undrilled Jasperoids returned sample values of up to 2.0 g/t at surface. Jasperoids are excellent host rocks for mineralization and represent a strike length of roughly 500 meters.
  7. Range Front Fault Zone – Range front fault systems have, historically, laid host to many of the largest Carlin-Style gold deposits in Nevada. The range front fault, which runs along the eastern portion of the land package, is sizeable and untested, which has the potential to host a large deposit. Historic sampling returned values upwards of 5.0 g/t gold at surface on secondary structures. It should be noted that range front structures host 3 deposits on the eastern side of the Bare Mountain Range; Motherlode, SNA and the 144 Zone.

In my opinion, there is a TON of potential here, as Northern Empire begins to expand and fill the gaps between these historic deposits. As seen in the image above, it looks like one big shallow gold system, with good grade. In the gold mining world, it doesn’t get much better!

With the identification of these high prospective targets, Northern Empire is expanding their current drill program to 18,000 meters and have already begun the permitting process for a larger 50,000 meter program, which will focus on expanding the Crown Block resource and testing these new regional targets.

Exploration Drill Results – Daisy and Secret Pass

Step-out drill results from the Daisy and Secret Pass, released May 2nd, not only returned good grades and widths, but confirm that both deposits are open for expansion. The results are highlighted by,

  • Daisy Deposit –D18-001 step-out hole returned 108.2 meters grading 0.80 g/t gold.
  • Secret Pass Deposit – SP18-017 step-out hole returned 38.1 meters grading 0.95 g/t gold.

Daisy Drilling

Daisy Drilling

The highlighted D18-001 step-out hole encountered mineralization 53.35 meters down the hole, which was shallower than expected. Additionally, mineralization was encountered at the base of the Cararra formation, which suggests that there is a possibility for further mineralization to be discovered lower in the stratigraphic sequence.  In all, the drill results confirm that the Daisy Deposit remains open up-dip for further expansion. Please see the news release for complete details.

Daisy_SP_NR_18-05-01

 Secret Pass Drilling

18-05-01_SecretPassDDH_NR

The highlighted SP18-017 drill hole stepped out 200m west from the known Secret Pass Deposit and 196.9 meters deep encountered mineralization grading 0.95 g/t gold over 38.1 meters. To note, this hole was terminated before losing mineralization. Northern Empire states within the news release that they intend on re-drilling the hole to better understand the full extent of what has been discovered.  This step-out is a great result as it confirms that the Secret Pass Deposit mineralization is open to the west.

Corvus Gold

The last stop of the day was at the SNA Deposit, in the north-east corner of the property. As we approached the SNA Deposit, we first drove past Corvus Gold’s Mother Lode Open Pit, which is completely encompassed by Northern Empire’s Crown Block.

Mother Lode Open Pit

Corvus Gold’s Mother Lode Open Pit

For those who are not familiar, the Mother Lode Deposit has been a major focus for Corvus over the last year, with 10,000m of drilling in 2017 and another 13,000m of drilling planned for the first half of 2018. For those that may not be familiar, Corvus has a MCAP around $300 million, which is largely based on the drilling success at Mother Lode.  I find this interesting as a Northern Empire shareholder, because I’m intrigued by the amount of drilling that’s occurring around the existing open pit and, specifically, how that mineralization may extend out toward, or connecting to, the SNA Deposit.

Examining the satellite image below, you can see the concentration of Corvus drill holes not only in the vicinity of the open pit but, more importantly, along the claim boundary.

SNA Mother Lode

This is a fairly obvious observation, one that didn’t get past Northern Empire management; while viewing the SNA Deposit during our visit, drilling was taking place along the Corvus claim boundary.  In news released April 17th, Northern Empire confirmed that the Mother Lode mineralization does extend south towards the SNA deposit and have drilled significant gold grades from structures which cut favourable host rock for Carlin-type gold mineralization beneath the historic Telluride Mercury Mine.

Northern Empire Drilling beside Mother Lode Open Pit

Northern Empire Drilling beside Mother Lode Open Pit

Concluding Remarks

As I’ve said in the past, site visits are an excellent way for you to bring your due diligence to the next level, and nothing beats seeing the property and interacting with the people in person. My visit to the Sterling Gold Project was no different, as it gave me a better view of the upside potential of the property and the type of people managing the company.

Just to recap, here’s a list of what I see as the strengths for Northern Empire:

  • Good management team with extensive experience exploring and developing gold projects in Nevada.
  • The Fraser Institute ranks Nevada 3rd in the world for Mining Investment Attractiveness.
  • Northern Empire is in possession of all the necessary production permits to restart the Sterling Mine.
  • The Sterling Mine potential production scenario should be low-cost, as the Carlin Style gold mineralization will be mined from an open pit and is amenable to heap-leaching.
  • Exploration Potential – The Crown Block, especially, holds a lot of resource expansion potential as it appears all of the existing deposits have the potential to be larger; potentially, one large, shallow and good grade gold system.
    • 18,000 meter drill program underway and a larger 50,000 meter drill program on the horizon as it is currently being permitted!
  • Existing inferred global resource of 985,000 ounces of gold at 1.29 g/t.
  • CASH – $16 million!!

I believe there’s a lot of upside potential for Northern Empire if they’re able to execute their plan of expanding the resource at both the Sterling Mine and the Crown Block. I look forward to good news flow over the coming months as this story really begins to come together on the back of their 18,000m drill program.

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Until next time,

Brian Leni  P.Eng

Founder – Junior Stock Review

Disclaimer: The following is not an investment recommendation, it is an investment idea. I am not a certified investment professional, nor do I know you and your individual investment needs. Please perform your own due diligence to decide whether this is a company and sector that is best suited for your personal investment criteria. I do own shares in Northern Empire Resources. All Northern Empire Resources’ analytics were taken from their website and press release. Northern Empire Resources is a Sponsor of Junior Stock Review.

What’s going to be the catalyst for the junior gold stocks to escape this sideways to downward movement? To me, the key to a momentum change is discovery. Although the market on a whole seems to be stuck in neutral, money has been injected into the best junior gold exploration teams, and because of this, I think it’s only a matter of time before we get a stellar drill hole, which will bring eyes and cash back to the sector.

Supply and demand fundamentals control the direction of markets over the long term, and when looking ahead at almost any metal’s supply fundamentals, I think it’s clear that we’re in for a metal supply crunch in the years ahead. Bull markets driven by supply destruction are very strong, mainly because it requires not only the discovery of new deposits, but those discoveries also have to be permitted developed, and that takes time.

It’s my contention that the next bull market in metals will be discovery driven, as the world’s major mining companies look to fill the supply gaps that are developing in most of their reserve and resource inventories.

In my opinion, buying the highest quality companies gives you the best possible odds of being right when the market turns. The company I’m going to share with you today, Northern Empire Resources Corporation, is, in my opinion, one of those high-quality companies, and they’re poised to discover and expand their resources at the Sterling Gold Project in Nevada.

Let’s take a look.

Northern Empire Resources Corp. (NM:TSXV, PSPGF:OTC Pink)

  • DTC Eligibility for its common shares listed on the OTC market in the United States

MCAP: $86.4 million (at the time of writing)

Shares: 66,586,700

Fully Diluted: 77,139,302

CASH: $16 million

Management/Insiders: 7.9%

Institutional Ownership: 32.7%

Coeur Mining: 11.6%

Imperial Metals: 3.7%

Northern Empire’s People

Northern Empire is led by President and CEO, Michael Allen, who is a professional geologist by trade and has 20 years of experience in the mining industry. Allen has worked in various senior roles over the course of his career with Redcorp Ventures, Silver Standard Resources and, most recently, West Kirkland Mining. For those who are not familiar, West Kirkland Mining’s gold project is located in Nevada, giving Allen 8 years of jurisdictional experience, and should prove to be an X-Factor when it comes to developing and exploring for gold on Northern Empire’s Sterling Gold Project.

Additionally, Northern Empire has a strong Board of Directors, made up of individuals with extensive experience in the mining industry. The Board is led by Executive Chairman, Douglas Hurst. Hurst, a geologist by trade, has a great track record for developing mining companies into premier takeover candidates. Hurst was a founding executive of both International Royalty Corporation and Newmarket Gold Inc. Both companies were taken over, first International Royalty Corporation by Royal Gold for $700 million, and most recently, Newmarket Gold by Kirkland Lake Gold for $1 billion.

The Board is rounded out by people whose careers share a common characteristic – successful company building. Each member has been involved in at least one development success in their career, and to me, it’s clear that this is the main goal for Northern Empire; to develop their Sterling Gold Project into a premier takeover candidate.

The other Board members are as follows:

  • Raymond Threlkeld has more than 32 years of experience within the mining industry. Threlkeld was Chairman of Newmarket Gold which, as previously stated, was purchased by Kirkland Lake Gold. He was also involved with Western Goldfields which was purchased by New Gold in 2009.
  • John Robins, a professional geologist by trade with 30 years of mining experience. He was a founder and Chairman of Kaminak Gold, which was purchased by Goldcorp for $520 million in 2016.
  • Adrian Fleming, a geologist by trade with over 30 years of experience in the mining industry. Fleming was President and Director of Underworld Resource Inc which was acquired by Kinross in 2010.  Fleming was an early mentor in Michael Allen’s career when they both worked on the Hope Bay Gold Project.
  • Jim Paterson with 20 years of experience on the financial side of the mining business, and the founder, CEO and Director of Corsa Capital Ltd.
  • Darryl Cardey and Jeff Sundar both have several years of experience within the mining industry and were a part of the successful development and sale of Underworld Resources.

Nevada, United States

Northern Empire’s 100% owned Sterling Gold Project is situated roughly 160 km northwest of Las Vegas, Nevada and encompasses a total of 14,109 acres over 4 contiguous claim blocks.  Nevada is situated in the western United States and has a long history of mining dating back to the 1840s. Although mining began over a 150 years ago, Nevada’s real fame in the gold mining industry didn’t come until the 1960s when ‘Carlin Style’ or sediment-hosted disseminated gold deposits started being mined.Nevada Map - Sterling Gold Project

Why did Carlin Style gold deposits take so long to be mined? Simply, nobody saw them. Unlike the outcropping gold bearing epithermal veins that were discovered by early prospectors, Carlin Style gold is very fine grained and not visible to the naked eye.  Since the 1960s, Nevada has produced around 20 million ounces of gold, making it truly a world-class destination for gold mining.

2018 Fraser Rankings

Given this, it comes as no surprise to me that the Fraser Institute issued a mining investment attractiveness score of 85.45, ranking Nevada 3rd in the world. The Fraser Institute’s score is based on a mixture of criteria, which includes, but is not limited to, the jurisdiction’s legal system, taxation regime, quality of infrastructure, political stability, and arguably most importantly, the jurisdiction’s geological potential. In my opinion, in terms of mining investment, it doesn’t get much better than Nevada.

Sterling Gold Project

The Sterling Gold Project has a Global Resource of 23,811,800 tonnes at 1.29 g/t for 985,000 ounces of gold and can be broken down into two key areas; the Sterling Mine, which is in the southern portion of the property, and the Crown Block, which resides in the north.

Sterling Mine

The Sterling Mine is a past gold producer with the surrounding area having historical ties that extend back to 1906, with the Panama Mine operating until 1940. The region then saw limited exploration until 1980 when the Sterling Mine began production. The Sterling Mine consists of 3 separate open pits and 2 underground mines, which produced 194,996 troy ounces from 853,984 tonnes of ore for an average grade of 7.44 g/t, over its 20 years in operation.

The Sterling Mine’s deposit mineralization is Carlin Style and is amenable to heap leaching. In the past, the open pit and underground mined ore was placed onto heap leach pads and, without crushing, gold recoveries averaged 88%.

The Sterling Mine does have an existing pit constrained inferred resource of 3,081,000 tonnes at 2.57 g/t for 254,000 ounces of gold. The ‘pit constrained inferred resource’ refers to the estimated economic surface resources found within a 45-degree constant slope pit shell.

Additionally, there’s a non-pit constrained inferred resource of 350,000 tonnes at 3.38 g/t (1.7 g/t cut-off) for a total of 38,000 ounces of gold. The non-pit inferred resource represents mineralization that could potentially be of economic interest, if selective underground mining of the mineralized zone, below the projected pit shell limits, was carried out.

NOTE: The Sterling Mine pit constrained inferred resource grade of 2.57 g/t is fantastic, especially if you consider that it’s amenable to heap leaching for the extraction of its gold. This is a great example of the upside potential at the Sterling Gold Project, as Carlin Style gold mineralization that’s mined in an open pit and has good grades can be very profitable!

Gold Production at the Sterling Mine

A major advantage to the past producing Sterling Mine is that its infrastructure is in place and ready for operation. In the photo below, you can see the layout of the processing areas: The active leach pad, the permitted leach pad, processing ponds and processing facility.
Sterling Mine leaching

Additionally, from the satellite photo below, you can see the layout of the permitted open pits, Burro, Sterling and Ambrose. In the top right of the image is the processing area, as shown above. Finally, the 144 Zone portal, in the bottom right, gives access to the historical underground workings.

With the necessary permits in hand, Northern Empire has greater control over their production start date, which is an enviable position for most gold exploration and development companies. Moreover, as an investor, the fact that Northern Empire has the necessary production permits in hand is a huge plus, because it reduces the overall risk associated with the Project.

Sterling Mine Exploration Potential

While having the production permits and an inferred resource are the basis for what looks to be a promising future for Northern Empire, the most exciting part of their story, in my opinion, is the exploration potential of the property.

Exploration and infill drilling on the Sterling Mine will focus on the 2017 high grade drill holes that sit on the pit shell edge, as can be seen in the satellite photo below.

Sterling Mine aerial photo

As well, in the computer-generated Sterling Mine model image, you can gain a better perspective on the 3 dimensional open pit shell and the location and orientation of the Burro Fault, which is thought to be one of the most important structures for the deposit. Other minor faults in the area trend north to north-northeast and are important in terms of the future exploration of the Sterling Mine area. As the Technical Report states,

“they are significant because they are intimately associated with mineralization, and were almost certainly conduits for hydrothermal fluids.” ~ Technical Report – pg.7-8

Sterling Mine computer generated model

PUSH: Watch for drill results from the Sterling Mine. Further proof of continuity in the existing inferred resource and successful step out drilling will be major gains for the company.

The Crown of Northern Empire

Crown Block

The Sterling Gold Project’s north end is occupied by the Crown Block, which is further broken down into 4 main targets: Daisy Deposit, Secret Pass Deposit, SNA Deposit and Shear Zone. The target mineralization which is found in the Crown Block is concentrated around the same detachment fault structure that hosted Barrick Gold’s past producing, roughly 2.3 million ounce Bullfrog gold mine.

The gold within the Daisy and SNA Deposits are carbonate-hosted and classified as Carlin-Style, while the Secret Pass is volcanic-hosted and classified as epithermal.

 

Daisy

The Crown Block’s Daisy Deposit is a past producing open pit gold mine (Glamis/Rayrock), having produced 104,000 ounces of gold between 1997 and 2001. As listed in the Sterling Gold Project’s inferred resource table, Daisy has an inferred resource of 5,362,000 tonnes at 1.34 g/t for 222,000 ounces of gold.

High grade surface samples, up to 15 g/t gold, and 2017 drilling suggest there is potential for expansion of the Daisy Deposit resource. Examining the satellite photo below, you can see the highlighted 2017 drill intercepts – holes D17-002, D17-001 and the 2018 drill intercept from hole D18-003C – and the location of high-grade surface samples which are represented by the purple squares. PUSH: 10 holes are planned for Daisy Deposit in the 2018 drill program. As mentioned above, one stellar drill intercept has already been released, assaying 1.41 g/t over 123.93m, a great result. Watch for more drill results from Daisy in the weeks ahead, as Northern Empire looks to expand the Daisy Resource down dip.

Crown Block - daisy cross section

Daisy Deposit Cross-Section – Open Down Dip to the north

Secret Pass

The Secret Pass deposit, like Mother Lode, is volcanic-hosted with disseminated gold mineralization and has a current inferred resource of 11,143,000 tonnes at 0.93 g/t for 335,000 ounces of gold. 2017 drilling on the Secret Pass Deposit was highlighted by SP17-001: 82m @1.26 g/t Au and SP17-002: 30.48m @0.55 g/t Au. Additionally released on March 20th 2018 – SP18-003C: 70.0m @1.79 g/t.

All three drill holes can be found on the satellite photo of Secret Pass below, including the location of pending and proposed drill holes for 2018. With the purchase of additional claims south of the deposit, Northern Empire will be able to pursue hole D-164, which returned a huge intercept of 56.39m at 3.13 g/t.

PUSH: 15 holes are planned for the Secret Pass deposit in 2018. Watch for drill results in the weeks ahead, as Northern Empire looks to expand the resource both laterally and at depth.

Secret Pass

SNA Deposit

The SNA Deposit is a past producing mine and was formerly referred to as Sunday Night Anomaly from 1991 to 1995. The SNA Deposit hosts Carlin Style gold mineralization and has an inferred resource of 3,875,000 tonnes at 1.03 g/t for 126,000 ounces of gold.

Interestingly, the SNA Deposit lies in close proximity to Corvus Gold’s Claim boundary, and more importantly, their Mother Lode open pit. In the satellite image below, you can see Corvus Gold’s claim boundary outlined in orange, along with Northern Empire’s SNA Deposit toward the bottom right.

Crown Block - SNA

In Corvus Gold’s 2017 drill program, they hit 51.8m of 1.86 g/t gold which included an interval of 19.8m of 3.43 g/t. The reason I mention this is because the hole was located roughly 8 meters from the claim boundary with Northern Empire. As you can see in the satellite image, Northern Empire’s property completely surrounds Corvus Gold’s Mother Lode deposit and needless to say, makes this is a very intriguing target area with a lot of potential for Northern Empire!

PUSH: +16 holes are planned for the SNA Deposit in the 2018 drill program. Watch for drill results as Northern Empire attempts to expand upon the SNA deposit resource.

Concluding Remarks

As I mentioned in my introduction, I believe that placing yourself in quality companies is the way to succeed in a business where the odds of success are typically stacked against you. That said, quality doesn’t mean they’re free of risk.

In terms of Northern Empire, I believe the biggest risk is an unsuccessful drill program in 2018, which would result in minimal to no improvement in their existing inferred resource. In this worst case scenario, I don’t see much upside from today’s current market cap.

While there’s always a chance of coming up empty handed when exploring, I think there’s a far better chance that their resource will increase, and with permits in-hand, Northern Empire’s Sterling Mine is ready to go.

Recapping Northern Empire’s strengths:

  • Good management team with extensive experience exploring and developing gold projects in Nevada.
  • The Fraser Institute ranks Nevada 3rd in the world for Mining Investment Attractiveness.
  • Northern Empire is in possession of all the necessary production permits to restart the Sterling Mine.
  • The Sterling Mine potential production scenario should be low cost, as the Carlin Style gold mineralization will be mined from an open pit and is amenable to heap-leaching.
  • Great exploration potential within the Sterling Mine and the Crown Block’s 4 main target areas: Daisy Deposit, Secret Pass Deposit, SNA Deposit and Shear Zone.  15,000m of drilling planned for 2018.
  • Existing inferred global resource of 985,000 ounces of gold at 1.29 g/t.
  • CASH – $16 million!!

I am invested in Northern Empire and am looking forward to news flow over the coming months.

Don’t want to miss a new investment idea, interview or financial product review? Become a Junior Stock Review VIP now – it’s FREE!

Until next time,

Brian Leni  P.Eng

Founder – Junior Stock Review

Disclaimer: The following is not an investment recommendation, it is an investment idea. I am not a certified investment professional, nor do I know you and your individual investment needs. Please perform your own due diligence to decide whether this is a company and sector that is best suited for your personal investment criteria. I do own shares in Northern Empire Resources. All Northern Empire Resources’ analytics were taken from their website and press release. Northern Empire Resources is a Sponsor of Junior Stock Review.

Northern Empire Resources Corp. (TSX-V: NM) released results from its Daisy Deposit  as part of its 2018 15,000-metre drill program to expand resources at the Sterling Gold Project in Nevada.  These results will go towards an updated resource due in the first half of 2019 and indicate the potential for an open pit, heap leach operation. The Daisy Deposit is located within the Crown Block of deposits in the north of the Company’s property.

Drill hole D18-003C was a vertical core hole that returned an intercept of 123.93 meters of 1.41 grams per tonne (g/t) gold (Au). The intercept included 38.25 meters of 3.09 g/t Au and oxides in the hole extended to a depth of 173 meters.

This is the third drill hole Northern Empire has reported from the Daisy Deposit.  Results from last year included 47.24 meters of 1.47 g/t Au in hole D17-001 and 21.34 meters of 1.83 g/t Au in hole D17-002.   All historical drilling at Daisy occurred before the introduction of NI 43-101 reporting standards, so confirmation drilling is required to expand the resource. Historical drilling was also all reverse circulation (RC), so core holes are vital for developing a comprehensive geological model.

In comparison to historical holes near D18-003C, yesterday’s result encountered mineralization closer to surface than expected. In concert with nearby mapping and sampling which returned surface grades of up to 15g/t, these results are demonstrative of the potential this system could be larger than previously thought.  

Michael G. Allen, President and CEO, commented:

“D18-003C is the first of at least 10 exploratory, resource expansion, and infill holes that we plan to drill into the Daisy Deposit as part of our 15,000-meter program.  The exceptional grade of these results is very encouraging. All of the mineralization from 67.88 to 173.22 meters down the hole was oxidized, as was the final 2.87 meters of mineralization. For the high-grade core of the deposit, where we cut 38.25 meters of 3.09 g/t gold, cyanide solubility assays averaged 90% of fire assay, indicating that the Daisy deposit may be amenable to open pit mining with heap leach recovery of gold.”

The broad intervals of relatively shallow, high-grade oxide mineralization present here are key if Daisy is to ever benefit from a low cost and efficient open pit, heap leach operation.  The advantage of heap leach mining is that they generally have low all-in sustaining costs and provide rapid payback to the operator. The average grade of heap leach operations in Nevada is approximately 0.7g/t gold, which would make the inferred resource at Daisy of 174,000oz of gold at 2.12g/t triple that.

The Daisy Deposit is located in the Bare Mountain district known for its legacy of past production. The trend is along an east-west structure that hosts Barrick’s Bullfrog Mine on the westernmost extension and stretches to the east where Northern Empire’s SNA deposit and Corvus Gold’s (TSX: KOR) Mother Lode deposit. Mother Lode is located completely within Northern Empire’s claim package. Along this trend, more than four million ounces of gold have been extracted or identified in situ.

With several high-grade historical holes and showings, Northern Empire’s overall land package remains underexplored and numerous regional targets demand follow-up.   For 2018, Northern Empire management put together a large exploration program with the intention to expand the resource through drilling. The company’s exploration is starting to demonstrate the potential at the Daisy Deposit.

The market has been responding positively to drill results. Since initial results released from the Daisy deposit on October, 04, 2017, shares in the company have moved from 77 cents per share to a year-high of $1.43, and at close of Feb. 23, 2018, $1.30.  Upon release of the most recent results from Daisy, the stock rose 12 cents to $1.39 on 231,088 shares.

The company is also responding positively to these results with immediate plans to mobilize an additional drill rig to Daisy. Currently rigs are working on the SNA and Secret Pass deposits which are part of the Crown Block of deposits which includes the Daisy Deposit. In addition, field crews are mapping extensions of the known deposits and new drill targets.

This is just the beginning for Northern Empire in Nevada.  Nevada is one of the largest gold producers in the world, renowned for open pit deposits which are amenable to heap leach mining.  The early results from Daisy are indicating that the company is on the right track to adding high grade ounces to support the case for another open pit, heap leach mine in Nevada.

 

by Andrew Topf

50M+ ounce Walker Lane Trend

While most gold investors are familiar with the Carlin Trend – the largest gold-producing region in the United States – there are other, less explored parts of Nevada starting to attract a lot of attention. Specifically, the Walker Lane Gold Belt where company-making discoveries are being drilled.

Located in southern Nevada, Walker Lane has some of the most important mining districts in North America including Comstock, Tonopah, Goldfield, Bullfrog and Aurora. Estimated to host over 50 million gold ounces, the region is being actively explored by Kinross and Barrick at the producing Round Mountain Mine, Gryphon Gold at the Borealis Mine, and Newcrest Mining at the Redlich project.

Unlike the Carlin Trend, where most gold projects are mining ore less than a gram per tonne, Walker Lane is starting to stand out on its own merits with exceptional high-grade assays.

High-grade gold mine open for expansion

Northern Empire Resources (TSXV: NM; USOTC: PSPGF) is a well-financed gold exploration and development company focused on an emerging gold district in the Walker Lane Trend. The Sterling Gold Project hosts four distinct deposits, including a fully permitted, open-pit mine. The Sterling Mine is one of the highest-grade heap leach mines in the western United States.

 


(image 1) Nevada Regional Map: Sterling Gold Project

Situated 185 kilometres (two-hour drive) northwest of Las Vegas, on the eastern flank of the Bare Mountains, Sterling features five past-producing open pit and two underground gold mines. Drilling, surface mapping and sampling on the project suggests that the historic deposits are open for expansion and there is potential for new discoveries. The property still has infrastructure in place from 2015 when the Sterling Mine was last in production.

A history of success: $3B in takeout value

Along with having an outstanding property with exploration upside, Northern Empire also features a management team with an exceptional record of creating value for shareholders. Led by Executive Chairman Douglas Hurst and Michael Allen, President and CEO, the Northern Empire board has created over $3 billion in takeout value, including Newmarket Gold, acquired for $1 billion by Kirkland Lake, Kaminak Gold, acquired by Goldcorp for $520 million, International Royalty Corp, bought by Royal Gold for $700 million, Rainy River Resources, bought by Newgold for $310M, and Underworld Resources, purchased by Kinross Gold for $138 million.

Currently sitting at a $80-million market capitalization, Northern Empire has a cash balance of $18 million, having recently completed a $15 million bought deal financing that included no warrants. In fact, the company raised $35 million in 2017 with no warrants.

The gold junior is coming off a successful 2017 drill campaign and will aggressively drill known mineralized zones in 2018 to expand resources and explore for new deposits on its 125-kilometre land package.

709,000 ounces inferred, plus newly staked ground

The story of Northern Empire began in May 2017 when it acquired the Sterling Gold Project in Nye Country from Imperial Metals for $10M. The $20 million acquisition financing included an investment by global precious metals producer Coeur Mining, which earned an 11.6% stake in the company.

Northern Empire is backstopped by the low risk, permitted heap leach Sterling Mine; majors have an appetite for high margin, high grade assets. The main event, however is the blue-sky potential north of Sterling, where more ounces are ripe for exploration. In particular the focus is on the SNA deposit, which has Carlin-type mineralization adjacent to the Mother Lode deposit owned by Corvus Gold.

Between 1980 and 2000, nearly 200,000 ounces were pulled from Sterling’s three open pits and two underground mines. The run of mine ore was placed on heap leach pads, where gold recoveries averaged 88%.

Total inferred resources at the project are 709,000 ounces with an average grade of 2.23 grams per tonne gold – which is high for a deposit in Nevada where most deposits are lower-grade.

Northern Empire has all the permits required to operate the Sterling Mine. In May 2016 the mine was permitted to restart operations, with the Bureau of Land Management finding that the mine would not have significant environmental impacts.

Over the last six months the company has been aggressively expanding the property, having staked an additional 489 claims in June, thereby increasing its original land position by 50%. Another 261 claims were staked in October, which further solidified Northern Empire as the dominant landholder in the Bare Mountains, a district which includes the past-producing Sterling, 144, Daisy, Secret Pass, Gold Ace, Mother Lode deposits, and Bullfrog Mine.

Four jewels in The Crown

Exploration is focused on the Crown Block of deposits just 7 kilometres north of the Sterling Mine. For the first time the Crown Block has been consolidated in a contiguous land package under one ownership. The Crown Block hosts four primary targets: Daisy deposit, Secret Pass deposit, SNA deposit and the Shear Zone target. The mineralization follows the same East-West detachment fault structure that hosted Barrick’s Bullfrog Mine, which produced 2.3 million ounces of gold at an average grade of 3.2 grams per tonne (“g/t”).

Glamis and Rayrock previously operated the Daisy Mine, which included Daisy, Secret Pass, and Mother Lode pits, and produced 104,000 ounces of gold between 1997 and 2001. When gold dipped below $300, the mine was closed down.


(image 2) Daisy Deposit map of drill holes

A total of 160 holes were drilled at Secret Pass which was previously mined in the 1990’s. Significant drill intercepts beyond the existing pit indicate potential resource expansion. Drill hole D-320 on the eastern edge of the historical pit intercepted 1.02 g/t gold over 77.7 metres.

SNA lies on a north-south structure that hosts Carlin-type mineralization which is open for expansion. Historically 149 holes were drilled at SNA. The Shear Zone is on the upper level of an epithermal vein and indicates potential for bonanza grades at depth. Past discoveries of mineralization were not followed up on.

2017 drilling confirms resource model, opens up new opportunities

In August 2017 Northern Empire initiated the first phase of an exploration program designed to confirm and expand the inferred resources at the Sterling Gold Project. Historic drill holes from the Daisy deposit include 68.58 g/t Au over 2.02 m, 7.37 g/t Au over 19.81 m, 80.77 g/t Au over 2.10 m, and 4.63 g/t Au over 35.05 m.

Of the planned 5,200 metres of drilling, over half was focused on the Sterling Mine, where Northern Empire outlined a pit-constrained inferred resource of 231,000 gold ounces grading 3.67 g/t. The work provided confidence in the resource, tested for extensions along strike and provided metallurgical samples prior to Northern Empire beginning economic studies.

The 52-hole drill program, 25 of which were reverse circulation holes and 27 that were diamond-drilled, started with the Daisy and Secret Pass deposits within the Crown Gold Project. The company also performed an evaluation of the entire project and flew a geophysical survey to identify new targets.

The Daisy deposit hosts an inferred mineral resource of 174,000 gold ounces at an average grade of 2.12 g/t gold, while the Secret Pass inferred resource is 188,000 ounces of gold at an average grade of 1.65 g/t.

The drills then moved to the Sterling Mine to complete infill, resource expansion, and exploration drilling.  

The first 24 results of the drill program were released in November. According to Northern Empire’s CEO Michael Allen:

“This round of drill results supports our resource model of the Sterling deposit, as well as the location of the underground workings. Sterling was known to be a narrow, high grade deposit with excellent metallurgy. Of note, are the occasional broader zones of mineralization, such as 12.19 metres of 8.37 g/t gold, as well as previously unacknowledged lower grade mineralization being identified by Northern Empire’s drilling; both of which may represent real opportunities within the Sterling deposit. Also, our early exploration of the area to the west and south of the Sterling deposit has yielded interesting results.”

Assay results from another seven holes reported in early December highlighted shallow, high-grade oxide gold at the Sterling Mine, with several holes hitting significant mineralization at the edges of the resource model, indicating the deposit remains open for expansion. Notable drill intercepts included 10.0 metres of 14.59 grams per tonne, 9.05 metres of 8.66 g/t, and 7.59 metres of 8.25 g/t.

2018 drilling year-round: in progress

As the calendar turns to a new year, Northern Empire is making plans for a 15,000-metre drill program it announced mid-December; the drills have already begun turning. In this new phase, drilling will be focused on infill and expansion of the Sterling Mine, Daisy, Secret Pass and SNA deposits, as well as testing high-priority exploration targets. Drilling will be completed with both core (diamond drilling) and reverse circulation rigs.

This area of Southern Nevada is accessible 12 months a year and Northern Empire will be aggressively working all year round. In early 2018 the company will turn its attention to the Crown Block, where drilling will begin on the SNA deposit where Northern Empire has identified the potential for a large Carlin-type deposit. This work will be targeting north-south structures exiting the Mother Lode pit, adjacent to the north and owned by Corvus Gold, and where historic drill holes such as ML088, drilled on the company’s property, returned 10.67 metres grading 4.13 g/t starting at 60.96 metres, and 28.96 metres grading 1.76 g/t starting at 100.58 metres.

Indeed an exciting aspect of this round of drilling is the close proximity of Corvus Gold’s drills on that company’s Mother Lode project, just metres away from Northern Empire’s holdings. Mother Lode produced 34,000 ounces at an average grade of 1.8 g/t in the late 1980s but closed due to low gold prices. In December Corvus announced it has expanded the sediment-hosted Mother Lode gold system to at least 450 metres along strike.

Corvus Gold’s exploration program at Mother Lode has received a major response from the market, with the stock more than doubling over the past year (+126%); most of the gain has been in the last three months and can likely be attributed to its success at the Mother Lode.

Since Northern Empire is the dominant land holder, and owns all the land surrounding Mother Lode, any extension of Mother Lode beyond Corvus Gold’s tight boundaries is likely to add ounces to Northern Empire’s Sterling Gold Project.  

Drilling will also be completed at the Daisy and Secret Pass deposits with the goals of upgrading and expanding the resources, collecting metallurgical samples, and testing exploration concepts. On September 18 and October 4, 2017, the company announced drill results for Daisy and Secret Pass, highlighted by 47.24 metres of 1.47 g/t gold at Daisy and 82.30 metres grading 1.25 g/t at Secret Pass.

Conclusion

Northern Empire has an impressive assemblage of both past-producing gold mines and enticing exploration targets at its Sterling Gold Project in one of Nevada’s most promising gold mining regions: The Walker Lane Trend.

With the gold price powering above $1,330 per ounce, mineral-rich gold companies are rising in valuation once again, so what better time to get in on an exciting gold play that appears to offer investors ample upside? Northern Empire has the property, the treasury and the team to make it happen.

About the Author:

With over a decade of journalistic experience working in newspapers, trade publications and as a mining reporter, Andrew Topf is a seasoned business writer. He holds degrees in journalism and political science, and earned a Masters from the London School of Economics.

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