NuLegacy Gold#: Go West!
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Aggressive Step Out Success
While in 2018 NuLegacy Gold (CVE:NUG) demonstrated a large body of continuous mineralisation in the Iceberg / Serena zones, NUG has now shifted its focus towards identifying the high grade core of what is now clearly an extensive CTGD system of gold mineralisation. NUG’s most recent drilling stepped out 1,200m (3,900ft) west of the Serena zone towards the Northern Nevada Rift intercepting amongst other intercepts modest gold mineralisation of 3.1m at 0.39g/t. This intercept although not high grade confirmed that mineralisation extends down dip to the West within the same structures and Wenban 5 host rock.
8,700m Drill Programme; West is Best
NUG following a systematic relogging of existing core and the results from late 2018 has made major steps forward in its exploration targeting process. In 2019 through a 20 hole 8,700m (28,500ft) programme NUG will test prospects to the west of its prior drilling testing the deeper Eocene CTGD host rocks which as demonstrated by recent CSAMT results lie beneath Miocene basalt cover. NUG will continue to target the angled fault structures identified in 2018 as key to hosting high grade mineralisation and with the 2018 success from the westerly SR18-02C (22.1m at 6.59g/t Au) it is thought the mineralisation system strengthens down dip to the West, an area which has largely been previously ignored due to the basalt cover.
Nevada Remains Core to Enlarged Barrick Gold
Despite an uptick in sentiment towards gold stocks on the back of dovish Fed activity and a rally in the gold price up to a ten month high of US$1,341/oz and now up 2% YTD. However, the landmark merger between Barrick Gold (ABX US) and Randgold Resources has resulted in underperformance for NUG and its regional peer group as investors await the results of a strategic overview. We believe that the recent bid by ABX for Newmont Mining (NEM US) demonstrates Nevada’s importance to the majors’ growth strategies, however, it is by no means a done deal.
Recommendation and Target Price
In 2019 we expect NUG to build on the major breakthroughs in its understanding of the Red Hill geology with a work programme focused on identifying the high-grade core of the substantial discovered system of mineralisation discovered to date.
We reiterate our Speculative Buy recommendation.