CEO Interview, Walker River Resources, a high-grade Nevada gold play
by Peter Epstein, MBA | posted in: Gold, Interviews, Nevada, Walker River Resources | 0
There are over 100 N. American-listed gold juniors with one or more properties in Nevada. Many reading this article probably know that Nevada is not just in the Top-10 or Top-5 — it’s #1 of 84 ranked global mining jurisdictions in the most recent Fraser Institute Survey of Mining Companies.
Nevada is elephant country with some very LARGE projects, most of the best are held in a JV between Barrick Gold & Newmont — Nevada Gold Mines (NGM). In 2021, NGM produced 2.0M ounces at a low All-in-Sustaining-Cost (AISC) of US$949/oz.
There are both high-grade mines (and past-producers) as well as bulk tonnage low-grade operations, many of which are processed by heap-leaching of mined ore. The world-famous Cortez Trend hosts several of the top gold mines/development projects in the world.
However, as great as Nevada is, there’s one prerequisite that’s critically important. It’s best to have a discovery under one’s belt because drilling can be costly & time-consuming. The geology is sometimes complex, making drilling difficult, and deposits are sometimes quite deep (1,000+ meters).
With this in mind, I return to Walker River Resources. Management has been drilling the 100%-owned Lapon Gold project for seven years with some truly spectacular results among the 82 holes drilled to date. However, only recently has the technical team become gained a better handle on geology & structure.
Given shallow drill results incl. 12.2 m @ 77.6 g/t gold in 2016; 13.7 m @ 96.0 g/t incl. 1.5 m @ 571 g/t in 2019; and 122 m @ 1.84 g/t reported on March 31st, one would think the Company’s valuation would be C$40M+, not C$17M. This is Nevada, high-grade, near-surface — a trifecta of attractive exploration metrics.
Yet Walker River has been largely a one-man show, led by Michael David, BSc., operating on a shoestring budget, on a property that has a complex geology and sits atop a steep mountain with limited infrastructure.
During most of the time that management has been drilling, the gold price has been weak and gold juniors out of favor. Over the 5-yr. period 2015-2019, gold averaged US$1,267/oz. vs. US$1,965/oz. today.
Critics of Mr. David claim he has not shared enough drill data, has experienced many painful delays in reporting drill results, has over-promised & under-delivered, and is not good at communicating the story to investors. He’s been described as over-confident & stubborn.
In my numerous conversations with Michel, he has been gracious and has spent the time needed to explain things. Yes, there have been delays and fewer drill holes completed than the market expected.
Some of the delays can rightfully be blamed on COVID-19 and the well-known slowness in getting assays back from the lab. Lab delays are especially impactful for a company on a tight budget that NEEDS drill results to inform the next set of drill targets.
These factors have caused the Company to fly under the radar and for stock gains on strong results to be met with selling as investors reason that it will be several months before the next news release.
We saw this play out last week as shares ran to $0.14 before pulling back to $0.075. Currently, the price is $0.085 and the market cap is $17M. How can Walker River break free of this pattern and climb to a more reasonable valuation? How about landing a STRATEGIC PARTNER?
In the following interview with CEO Michel David, I try to uncover the answer to this long-standing question, how to better tell the Walker River story.
Michel, thank you for taking time from your busy schedule to answer some questions. Can you please give readers an overview of Walker River Resources?
My pleasure. Our 100%-owned high-grade Lapon Gold Project (LGP) consists of 2,940 acres within the Walker Lane shear zone, a 100 km wide structural corridor extending southeast from Reno, Nevada.
The Project is ~60 km southeast of Yerington, Nevada, and hosts past-producing operations. The LGP includes Lapon Canyon, the Pikes Peak claims four km to the north, and the Rattlesnake & Range Front claims three km to the west.
Old-timers in the late-1800’s & early-1900s took extraordinary measures to move equipment up a steep mountain to 8,000-9,000 ft. They risked their lives and invested substantial sums on mining infrastructure for one reason…. high-grade gold.
We believe they were mining at least one troy ounce-per-ton (31.1 grams/tonne) material, and in some areas probably multiple ounces/ton. Our team has found ~2,000 feet of underground workings in three adits and we’ve drilled 82 mostly shallow holes since 2015.
This advanced-stage exploration play has the potential to become a large development project that would be quite attractive to a Major that could significantly expand the work being done.
That’s interesting, so at what stage does your board think that a Major or mid-tier gold company might want to step in as a strategic investor?
I’ve seen and/or worked on large systems in Nevada and in Canada. While we haven’t proven we have a large system yet at LPG, there’s a lot of smoke, and 82 drill holes to date is not a trivial number.
In addition to Barrick & Newmont, large companies with a presence in the Walker Lane Trend include; Kinross, AngloGold, Hecla Mining & Coeur Mining. Barrick & Newmont have had such phenomenal success in Nevada, that other mid-tiers & Majors are looking at the State. The Walker Lane Trend should be high on anyone’s list.
Naturally, our board has been talking with a few majors for a while now, more companies have expressed interest over the past several months. We’re open to ideas on ways to collaborate. In the meantime, I would like to drill seven holes at Pikes Peak and follow up with drilling at the Lapon zone.
You described Walker’s latest drill results [released on 3/31/22] as a game-changer. Please explain.
Yes, good question. For years we’ve been drilling & finding pockets of high-grade & very high-grade gold, but we didn’t fully understand the role granite played in the system. After our last set of drill results, we think we understand it better.
We announced the discovery of a new high-grade mineralized zone [the Hotspot] featuring significant gold mineralization in granite. This is really important, previously the granite was thought to be barren. We will now go back and assay the granite core that was never sent to the lab. That’s a really low-cost way to add ounces.
Hole 21-65 (1.88 g/t Au over 54.5 m) was the discovery hole. Holes LC 21-80 & LC 21-81 returned intervals of; [7.6 g/t Au over 48.8 m, incl. 77.2 g/t over 4.5 m] and [5.7 g/t Au over 60.9 m, incl. 17.7 g/t over 18.3 m + 99.7 g/t over 1.5 m].
LC 21-82 delivered [1.84 g/t Au over 122 m incl. 8.6 g/t over 9.2 m + 4.3 g/t over 47.3 m]. Notably, those latter two results were in granite. I should add that the 122-meter interval in LC 21-82 ended in mineralization. This new data gives us the confidence to drill deeper holes, which we plan for later this year.
These surprising results at the new Hotspot zone are very promising for our follow-up drilling around holes LC 19-42 & 19-43 — two of our best holes drilled in 2019. LC 19-42 returned 13.7 m of 96.0 g/t Au, incl. 1.5 m of 547 g/t.
Holes we’ve drilled to date have typically been 400-500 ft., but the rig we’re getting this Spring/Summer will be able to drill to depths of 900 ft.
While one can’t argue with truly blockbuster results, some complain about a lack of news, the Company not presenting at conferences, long waits for assays, and too little data accompanying drill results. Some see Walker as a one-man show led by a stubborn, hard-to-reach exec. What do you say to your detractors?
I know that some are not happy with the pace of news flow and things like that. In the end, will that matter if/when a Major steps up with a very attractive farm-in proposal? That news could drop this year or next, a lot of eyes are on us.
Everyone’s entitled to their opinions about how to run a small-cap company, the last two years during COVID-19, with unprecedented lab delays, on a shoestring budget, starting from scratch a decade ago with no surviving data on geology or structure.
Yes, I can be stubborn, but I listen to ideas & opinions and choose what I think makes sense. I certainly trust my technical team and we typically see eye-to-eye. I have 35 years’ experience in geology & geophysics, sometimes I get emails from investors who are not mining professionals, telling me where to drill.
Would readers expect me to listen to these individuals, or to professionals with decades of experience, some with expertise in Nevada’s key formations at Nevada’s foremost gold companies?
I admit that communication with investors has been sporadic and I’ve committed to improving on that front. We’re currently looking to hire a full-time Geo to help us with investor relations, making/updating drill maps & tables, and providing more exploration data.
And, we’re going to start presenting again to investors at conferences.
Earlier we talked about the idea of a Major potentially looking to farm into our LPG project. As I said, Majors are following us, some more closely than others. They understand our approach and recognize the constraints we’ve had — constraints that they would not have if they partnered with us.
Most who have reviewed our drill results & interpretations in detail have come away impressed with what we’ve done and where we’re headed. These unbiased stamps of approval should be a source of comfort for readers in our progress to date.
Thank you Michel, very interesting. I look forward to Walker’s next drill results. Good luck hiring an IR person to help with communicating the Walker River Resources story.
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At the time this article/interview was posted, Walker River Resources was an advertiser on [ER] & Peter Epstein owned shares in the Company.
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