A Shift in Perspective, NuLegacy Gold

Each day it seems as though the market is realizing the absolute necessity of mining. The coming financial disaster, the culmination of the 2008 breakdown left unresolved and pushed forward by Qualitative Easing accomplished exactly what one would expect: free market for the wealthy, not to the public. That level of money requires large markets; particularly technology markets where every cycle people pretend that technology does not fall under the same fundamental company analysis as other companies.

These absurd and ridiculous ‘new models’ which are reminiscent of the internet tech bubble models of buying customers required free money, it required managed money, huge hedge funds, ETF’s and companies inflating their stock price by buying back stock rather than investing in their development. This is not a tirade about the general economy and the flow and placement of money. What I am illustrating is that funding ideas comes from many places and nothing is more lucrative then borrowing at near zero rates and trying to convince people that having under employed people drive you around in their personal car, instead of a taxi is revolutionary.

NuLegacy gold has had a challenging year but the Chairman stepped up, has made conclusive and strong decisions and has set course on a new target and opportunity to reinvigorate the company. I am not going to sugar coat this story too much, there are some issues that we need to take a look at but at the end of the day I would not have any words to say if there was not a real opportunity to make money here with NuLegacy.

I have had the pleasure of knowing the former President and CEO John Anderson and speaking with the former Chairman, now CEO again, Albert Matter just this week. I would encourage people to check out this link to the website to read the story of NuLegacy. It is a great story. So, before we get into some detail this stock has something for the current owner and a large upside for a new investor.

Let’s dive right in…the Value Proposition

The company is exploring for gold on a 108 sq. km trend with the famous Cortez gold trend in Nevada one of the friendliest mining jurisdictions on the planet. Red Hill, the flagship property lies on this trend along with 3 of Barrick’s best gold deposits.

To put some more meat on that story: Nevada is the 4th largest gold producing ‘nation’ in the world and with gold up over the past year, and despite some pull back with a possible trade deal the short- and long-term gold prospects are looking amazing. This is a district scale project with several Carlin style deposits.

The company has a world class team with 3 former Barrick executives on the Board and team, along with several exceptionally qualified and experienced professionals. Finalizing this consideration is the corporate structure which is both good and bad. There are 307 million shares outstanding which seems unattractive, but 60% of the ownership is with management, Industry partners (Barrick & OceanaGold) and some of the world’s top gold funds) and post the current financing that percentage will be 75% with incredible funds and world-class shareholders.

The flagship Red Hill project is right on trend with Barrick’s Fourmile, Goldrush and Cortez plays, as seen above. More on all of this but here is the thought:

To me it looks like the management, governance and geological team to assemble if you wanted to package a new discovery to a major like Barrick. The company has given me no indication that this is the case but as soon as I was speaking with Albert Matter and reviewing the last couple news releases it’s possibly the case. This is not a story of a company falling to the wayside; however, it looks more like an elite team has been assembled to apply a new, radical and ingenious strategy to deliver a world class deposit to a gold producing company.

Before I launch into the quality of the project it is necessary to look at this team.

Left out of the above snapshot is a great deal of detail but in short the experience of this team is well worth going and reading for yourself.

This is a team assembled by Albert Matter and ideally built for a Barrick hand-off. Since returning as CEO in April of this year Albert has deferred the 2019 exploration plan until well financed, cut corporate overheads by 40%, farmed-out some of the geological staff to friends in the industry to cut costs until the company is financed to re-started drilling, which looks to be in October or early November of this year.

Left out from the above snapshot (he’s in the next slide in the IP) is Charles Weakly, NuLegacy’s District Geologist. Over the last 10 years, Mr. Weakly directed early stage projects for Barrick Gold Exploration at Cortez, North Carlin Trend, Turquoise Ridge-Getchell, and Bald Mountain properties in Nevada.

He also directed many aspects of near-mine exploration activities for Barrick Gold Exploration at the Goldstrike mine area. Teams like this do not hang around losing projects. Teams like this find winners, are attracted by amazing projects and this new fundamental shift is perhaps the nudge that puts the drill in the holes necessary to either attract a sale, a JV or other partnership.

We need to look at the geology, the Carlin Trend, Eureka Trend and the intersection by the Northern Nevada Rift to understand Red Hill geology. The above map shows these parallel trends being intersected by the Northern Nevada Rift right at Red Hill. In 2017-2018 under the guidance of Charles Weakly, NuLegacy executed major geochemical, geophysical and ‘wildcat’ drilling programs.

When the team re-evaluated the data the resulting shift in perspective led to a ‘breakthrough analysis’ confirming the structural and stratigraphic connectors between Barrick Goldrush/Fourmile Carlin gold system and NuLegacy’s Red Hill Carlin gold system.

The key takeaways are they are on trend; there is a strong mineralized system with the same stratigraphy and that high gold is at structural confluence:

1. the high-angle faults and,

2. low angle thrust faults,

3. within the Wenban5 stratigraphic horizon.

2019-2020 objectives: Capitalize on the geologic ‘breakthrough’ by:

• Testing the connectors.

• Priority targets are the Fourmile ‘Look-alike’ and the Rift Anticline

2018-19 ‘Breakthrough’ analysis confirms the structural and stratigraphic connectors between Barrick’s Goldrush/Fourmile gold systems and NuLegacy’s Red Hill Carlin gold system:

• On trend.

• Strongly mineralized systems with the same stratigraphy.

• With the high-grade gold at the structural confluence of high-angle faults and low-angle thrust faults within the Wenban5 horizon.

• 2019-2020 objectives – capitalize by:

• Testing the connectors.

• Priority targets are the Fourmile ‘Look-alike’ and the Rift Anticline

Three holes are planned for Fourmile ‘doppelganger’ and two holes for Serena Offset while permitting is underway for Rift Anticline.

Serena Offset

The cross section gives a clear understanding of the target once we are arranged in our mind from a lateral view. We can see who the offset has shifted the target. This is what Chris Weakly has seen along the tend.

This fundamental shift in thinking comes from enormous amounts of data and experience while working this trend. The reasoning is that there has been a shift and as you can see in all the diagrams the Dw5 layer had been pushed up revealing two target points which the team is focus on drilling.

This is not just a push piece. Let’s look at some of the fundamental risks. The company has 354 million shares out fully diluted.

The company has been around for nine years and there has been dilution. Pretending like there is not is absurd but this has not diminished brokerages belief in the thesis. NuLegacy engaged Cormark Securities and Canaccord Genuity in arranging a ‘fully marketed’ 100-million-unit private placement. This brings $7.5 million into the company and more than enough to focus on the key targets and deliver on this new understanding of the geology. The below distribution does not reflect the additional financing but more importantly notice Barrick Gold, OceanaGold and Tocqueville Funds ownership. This is an incredible shareholder base.

There is a major upside for a new investor in this deal. Barrick Gold announced on Tuesday, Sept 17th a new discovery hole about 2 kilometers further north of the best drilling intercepts at its Fourmile project in Nevada. All of this points to there being a big opportunity for new investors. If you are looking for a year-round ability to drill, in a world-famous region with a world class team on a gold trend then this is a consideration.

This is an all season play and it is underway. The geology and team are exceptional and this shift could open up this system for profit and shift NuLegacy into a new position for investors.

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