Newcore Gold: Advancing a Highly Economic Gold Project in Ghana Towards Development

New Core Gold: Enti Project Interview with Luke Alexander - Detailed Summary

Key Concepts:

• New Core Gold: A gold exploration and development company focused on the Enti Project in Ghana.
• Enti Project: A district-scale gold exploration project in Ghana with a current resource base of 1.7 million ounces.
• PFS (Pre-Feasibility Study): A detailed engineering and economic study to assess the viability of a mining project.
• PA (Preliminary Assessment): An initial economic assessment of a mining project, less detailed than a PFS.
• NPV (Net Present Value): A financial metric used to evaluate the profitability of an investment.
• IRR (Internal Rate of Return): A financial metric used to evaluate the profitability of an investment.
• Tier 1 Jurisdiction: A politically and geologically stable country with a favorable mining environment.
• Resource Conversion: The process of upgrading mineral resources from the ‘Inferred’ to the ‘Indicated’ category, increasing confidence in the resource estimate.
• District-Scale Exploration: Exploration focused on identifying multiple deposits within a large geological area.

1. Company Overview & Project Recommitment

New Core Gold was founded approximately 5.5-6 years ago, rebranding from Pinerest Resources to signify a renewed commitment to the Enti Project in Ghana. This relaunch involved a new leadership team including Luke Alexander (President & CEO), Greg Smith (VP Exploration), Mal Carvosa (Head of Business Development), Doug Forester (Chairman), and Blaine Johnson (Lead Director). Since 2020, the company has invested heavily in the Enti Project, completing over 120,000 meters of drilling and undertaking significant technical de-risking work. Management and the board collectively own 15% of the company, demonstrating their confidence in the project. The Enti Project is described as a district-scale exploration opportunity within a “Tier 1” mining jurisdiction – Ghana – known for its robust economics.

2. Preliminary Assessment (PA) Results

In 2024, New Core Gold published a Preliminary Assessment (PA) for the Enti Project, outlining a simple open-pit heap leach operation. The PA, based on a gold price of $3,000/ounce, projected an after-tax Net Present Value (NPV) of approximately $970 million, a 70% Internal Rate of Return (IRR), and a payback period of just over six months. The project is estimated to produce around 120,000 ounces of gold annually over a 9-year mine life. The company anticipates that the upcoming Pre-Feasibility Study (PFS) will attract a higher market multiple due to its increased level of detail and reduced risk.

3. Current Work Program & De-Risking Activities

The company is currently transitioning from the PA to a PFS, expected to be commissioned in Q1 2024 and completed by mid-year. This involves extensive de-risking work, including:

• Infill Drilling: To convert Inferred resources to Indicated resources.
• Metallurgical Work: To optimize gold recovery processes.
• Hydrological & Geotechnical Studies: To assess water management and ground stability.
• Environmental Baseline Studies: To establish environmental conditions and plan for mitigation.

4. Recent Drilling Results & Resource Base

A current 45,000-meter drill program is fully funded from existing cash reserves. The initial 30,000 meters focused on resource conversion, successfully moving ounces from the Inferred to the Indicated category. The remaining 15,000 meters are dedicated to exploration drilling, targeting deeper mineralization. Recent diamond drilling results include:

• 174 grams per ton over 1 meter.
• 3.5 grams per ton over 23 meters.
• Almost 7 grams per ton over 8 meters.

These results suggest significant underground potential. The average vertical depth of drilling to date is only 100 meters, indicating substantial exploration upside. The current resource base stands at approximately 1.7 million ounces of gold:

• 970,000 ounces in the Inferred category.
• 740,000 ounces in the Indicated category.

The goal is to increase the Indicated resource to 1.3 million ounces or more to support the PFS.

5. Drilling Costs & Cash Position

Drilling costs in Ghana are approximately $100 per meter for Reverse Circulation (RC) drilling (near-surface) and $250 per meter for diamond drilling (targeting deeper mineralization). As of September 2023, the company had approximately $11 million in cash. Furthermore, 20 million warrants with a strike price of C$0.50 per share are currently “in the money” (trading above the strike price), with approximately 60% in the money, and are expiring at the end of February. The company anticipates receiving approximately $10 million from warrant exercises, potentially allowing for an expansion of the drill program and initiation of feasibility studies.

6. Shareholder Structure & Institutional Support

Management and the board hold a combined 15% of the company. Institutional ownership is currently at 55%, with significant holdings from:

• Franklin Templeton: A large precious metals fund.
• Aegis: A deep value investor.
• Ruffer (UK): A precious metals focused fund.
• Merc, SSI, Commodity Discovery, Adrian Day: Other institutional investors.

Three Canadian investment banks – Haywood, Canacord, and SCP – are providing research coverage of the company.

7. Community Relations & Permitting Process

New Core Gold has established strong relationships with the local community of Enti (population ~15,000), located 10 kilometers from the project. The company utilizes local services (hospital, schools, housing) and employs individuals from the community in its ESG team. Ghana is considered a favorable mining jurisdiction, being Africa’s largest gold producer and the sixth largest globally. The company expects to receive its mining lease within one year of publishing the PFS and to apply for environmental permits concurrently. The projected timeline is:

• PFS Completion: Mid-2024
• DFS & Permits: Second half of 2027
• Construction Decision: 2028
• Production: 2029 (estimated)

8. Key Catalysts & Future Outlook

Key catalysts for New Core Gold include:

• Ongoing Drill Results: Expected every 4-6 weeks.
• Warrant Exercise Proceeds: Anticipated by the end of February.
• PFS Publication: Mid-2024.

The company believes the PFS will be a significant catalyst, similar to the positive market reaction following the publication of the PA in 2024. The company encourages investors to follow their progress on social media platforms (X, LinkedIn, Facebook, YouTube).

Notable Quote:

“We’ve just started to test [the deeper mineralization] again and we couldn’t be more happy with the first set of results that we’ve had come back from that drilling.” – Luke Alexander, President & CEO, New Core Gold.

Technical Terms:

• Heap Leaching: A mining process where ore is piled into heaps and sprayed with a chemical solution to dissolve valuable metals.
• Inferred Resource: A mineral resource with limited geological evidence.
• Indicated Resource: A mineral resource with sufficient geological evidence to estimate its quantity and quality.
• Reverse Circulation (RC) Drilling: A drilling technique that uses compressed air to bring rock chips to the surface.
• Diamond Drilling: A drilling technique that uses a diamond-tipped drill bit to create a core sample of rock.
• ESG: Environmental, Social, and Governance – a framework for evaluating a company’s sustainability and ethical impact.
• DFS (Definitive Feasibility Study): A comprehensive engineering and economic study that provides the basis for a final investment decision.

Logical Connections:

The interview follows a logical progression, starting with a company overview and project introduction, then delving into the technical details of the PA, current work program, drilling results, and financial position. The discussion of community relations and permitting provides context for the project’s development timeline. The concluding remarks summarize the key catalysts and future outlook.

Conclusion:

New Core Gold is a well-funded gold exploration and development company with a promising project in a favorable jurisdiction. The Enti Project boasts a substantial resource base, significant exploration upside, and a clear path towards production. The upcoming PFS is expected to be a major catalyst, potentially unlocking significant value for shareholders. The company’s strong institutional support, experienced management team, and positive community relations further enhance its prospects.