Nexus Gold President and CEO Alex Klenman joined the Investing News Network at VRIC to discuss the company’s progress exploring and developing a portfolio of resource projects.
Nexus Gold (TSXV:NXS,OTCQB:NXXGF,FWB:N6E1) President and CEO Alex Klenman joined the Investing News Network at the Vancouver Resource Investment Conference to discuss the company’s progress in exploring and developing a portfolio of resource projects.
The company owns a collection of projects in both West Africa and Canada, which allows the company to strategically advance its projects in order to reflect market trends. Nexus Gold conducted a private placement in December 2019 of C$586,425, which the company intends to use in order to advance exploration and drilling efforts at both the McKenzie gold project in Ontario and the Dakouli 2 gold concession in Burkina Faso.
According to Klenman, Nexus intends to monetize a number of its current exploration projects in order to fund further exploration in a hybrid revenue-generating explorer model. The company’s focus moving forward is on both the New Pilot and McKenzie gold projects in Canada and the Bouboulou and Doukouli projects in Burkina Faso.
Below is a transcript of our interview with Nexus Gold President and CEO Alex Klenman. It has been edited for clarity and brevity.
Investing News Network: Before we get started, what is the name of your company, your symbol, and the exchange we can find you on?
Nexus Gold CEO Alex Klenman: Nexus Gold on the TSX Venture, NXS is the symbol.
INN: You have a number of properties in Africa and in Canada. You have taken on new ventures and exploration. What has happened in the last year? Bring us up to speed about what has happened over the last eight, nine, 10 months.
AK: For a couple of years now, we wanted to expand the scope of where we explore and what we do. We are in West Africa — Burkina Faso — and we have been there for years. A lot of the investors will know there are geopolitical risks and issues coming out of West Africa. Burkina, in particular, was not a great year.
One of the ways to de-risk that was to expand into other jurisdictions and we have done so in Canada. We picked up five projects across Canada, including properties in British Columbia and Red Lake, Ontario, as well as in Newfoundland. It is quite a variety of different types of projects. We de-risked what we do to a certain degree, as having all our eggs in the Burkina basket made us a one-trick pony. If anything goes horribly wrong, we have to go through 30, 60 or 90 days of negativity, then it recedes into the past and things go on. That is the sort of the nature of the game in Burkina, but we definitely wanted to give our investors some exposure elsewhere, and we are excited to be able to say we are now in Canada.
INN: Where is your primary focus on at the moment? Is it still in Burkina, or is it here in Canada?
AK: It is a good point. We have nine, almost 10 properties now, so we are going to concentrate on three or four of them. Two in Burkina and two in Canada. Those will be our flagship properties for the next year or so.
INN: And which ones are those?
AK: In Canada, it is the New Pilot project here in BC and the McKenzie Gold project in Red Lake, Ontario, which we will be drilling in the near term. In Burkina, the Bouboulou property, which you and I spoke about, and the most recent pick-up for us there is the project called Dakouli, which we really really like.
INN: Where are you at on that one?
AK: We were going to drill that in the first quarter of 2020, we kind of pushed that off a little bit. We want to put the money in Red Lake first, we’ve had a lot of success obviously in Red Lake with a lot of big names and a lot of things happening there. We’ve had some investors come into Nexus who are particularly interested in us drilling and getting more development time in Red Lake, so we are going to do that.
INN: OK. Bouboulou, where are we at there?
AK: Bouboulou is sitting, waiting for a big drill program. We are in talks with a couple of entities that may assist us in that. We will see how that goes, but if we do raise appropriate funding, we would like to drill a resource there. Let’s be honest, it is not going to be cheap.
INN: It’s a tougher sell right at the moment.
AK: Yes, we will see how the market goes. It’s ours; it is not going anywhere.
INN: Let’s come back to the Canadian property. Where are we at as far as your exploration is concerned?
AK: Well, I really want to talk about McKenzie. We have engaged a company called Rimini Exploration, they work with Great Bear Resources (TSXV:GBR,OTCQX:GTBDF), the marquee name in Red Lake right now. They provided us with a data summary, including a lot of historical data on the project. There are multiple double-digit samples in the 100 to 300 gram range. Great stuff to see at the surface with a small amount of historic drilling. It also had some very high-grade intercepts, not the widest intercepts but only a few holes. So, we are going to go in to do 1,000 or 2,000 meters here as soon as the permits come in, and we are going to try to do that by the end of Q1 2020.
INN: OK, so you have got an anticipated timeline on that.
AK: That might get pushed out depending on the permitting process, but we are funded for that, we are going to do that and it has already been initiated, so the sooner the better.
INN: And your other Canadian property, where are you there?
AK: Yeah, New Pilot here in BC has had some greatest historic numbers. We put C$40,000 to C$50,000 into that late last year. We are going to do another C$50,000 or C$60,000 to get it to the C$100,00 threshold and see where it goes from there. But it is close to home and it is easy for us to work in the summer months, for example.
INN: Still in the early stage?
AK: Yes, absolutely.
INN: What are you doing to create a revenue stream for yourself right now?
AK: That has really been a priority for us because everybody knows junior exploration is constrained by reality, which means you have to raise money. The only way to really raise money is through equity, and that is a process that over time can come to hurt you. In 2019 we were on the shopping spree, picking up all these projects. People were thinking, “What are you, crazy? You are not going to be able to work them all.” The idea is that we monetized a handful of them and we were able to do that with one of our projects in Burkina, the Rakounga project. It is a large project. We optioned it to a private company for C$2.25 million, that is C$1 million in cash and C$1.25 in work commitments over four years. Anytime that they walk away, the project comes back to us. So it’s a nice way to push the project forward.
If they follow through with the entire contractual arrangement, in four years they will have 75 percent of the project. We will have a million dollars in cash and that helps us augment these or mitigate these dilutive raises that we go through. It gives us an opportunity to get a hundred or two hundred thousand dollars through the door a year, which helps us with admin, listing fees and legal, which is an important part of what we do. I think it is great for us to try to become a revenue-generating explorer, sort of a hybrid if you will.
INN: Right. The market has changed also since we last talked. I have been just looking around here at VRIC, there are a lot more people here today, there is a lot more interest back in the resources sector. How is that having an impact on your different properties and Nexus?
AK: I’m certainly taking more calls and getting more emails; people are coming back to gold. It is funny you get people saying to stay in your lane and stop chasing momentum, but momentum is the nature of this business. Everybody wants that to happen, so we are lucky that gold is kind of coming back. We kind of thought it would — it looked like it was.
INN: Well, look at the difference in the price of gold from last year to this year.
AK: Yeah, I think we will see US$1,700 or maybe US$1,800 in 2020, and that is a great sign. It should bring more capital into the sector. It should give explorers more life, which is good for all of us.
INN: Are you getting interest from any of the majors looking at what you are doing right now?
AK: The reality is that they need to replenish their stocks. How they do that is they look to see who is working around them. Burkina is not really big, so everybody kind of knows everybody. We are going to continue to have those discussions and be aggressive, we are reaching out. You need big partners, you need people to take an interest in what you are doing.
INN: You seem to be particularly enthusiastic right at the moment. Is there one particular element of what you are developing here with Nexus that keeps you pretty stoked?
AK: Well, we got hammered in 2019. Our share price was depressed towards the end of the year. We had all sorts of things going on, including a really really hard tax loss season. I think we have come out of that. I think we have bottomed. I think we are looking for a better performance in 2020, but the way that we are going to get that to happen is obviously through drilling. We were very light on drilling in 2019, but we are going to be aggressive if funds allow us to be. We just raised a little bit of money that we are putting right in the ground in Red Lake, so we want drill intercepts. We think that is the way to push this thing forward, and we are going to go hard in that direction.
INN: As always with the junior, you need financing. What is your message to people who want to get in right now?
AK: We have been raising money; we are always raising money. If there is anybody who has a particular interest in what we do, please call the office and let’s have a chat. We are open for business. We would like to see the share price appreciate, and I think we are headed in that direction. January has been good, and I think as we move forward we are going to have a big year.
INN: Great, thank you very much. Thank you for sharing that.
AK: I appreciate it. Thank you.
Disclaimer: This interview is sponsored by Nexus Gold (TSXV:NXS,OTCQB:NXXGF,FWB:N6E1). This interview provides information which was sourced by the Investing News Network (INN) and approved by Nexus Gold in order to help investors learn more about the company. Nexus Gold is a client of INN. The company’s campaign fees pay for INN to create and update this interview.
INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.
The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with Nexus Gold and seek advice from a qualified investment advisor.
This interview may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, receipt of property titles, etc. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The issuer relies upon litigation protection for forward-looking statements. Investing in companies comes with uncertainties as market values can fluctuate.