Bravada Gold: It's All About the Sinters

Source: Thibaut Lepouttre for Streetwise Reports   06/28/2019

Thibaut Lepouttre, editor of the Caesars Report, considers the implications of the deal recently negotiated with OceanaGold for exploration of gold projects in Nevada.

Introduction

Over the past few years, we noticed one common thing in the mining sector: Most companies prefer to fall back on the so-called Tier 1 destinations in safe mining jurisdictions like North America and Australia.

One of those companies that has been pulling the “safe jurisdictions card” is OceanaGold Corp. (OGC:TSX; OGC:ASX),as it wanted to reduce the importance of the Didipio copper-gold mine in the Philippines in its asset portfolio. The company made a first strong move into North America with the acquisition of Romarco Minerals, which was bringing its Haile gold mine into production but has shifted gears and is going down the development curve by entering into exploration joint venture agreements with juniors.

One of those companies is Bravada Gold Corp. (BVA:TSX.V), which owns numerous prospects and projects in Nevada, a jurisdiction that’s probably as safe as it gets. Bravada was a bit “dormant” in the past few years as this small company was waiting for better times in the gold sector, but we feel the recently announced deal with OceanaGold is a good move for the company. Oceana will need to spend CA$13 million (US$10 million) on exploration to earn a 75% stake in the project, and that minimum spending requirement on this single project is a multiple of Bravada Gold’s current market capitalization.

There’s another reason why we are giving Bravada Gold another good look. CEO Joe Kizis was the person who brought the DeLamar project to Integra Resources Corp. (ITR:TSX.V; IRRZF:OTCQB). Unlike the upper management of Kinross Gold Corp. (K:TSX; KGC:NYSE), which failed to properly identify the exploration potential at the Idaho-based property, Kizis does seem to have a good nose for potentially valuable projects and this nose, in combination with his field experience on Nevada properties and his extensive in-state network, were important considerations for us as well.

Zooming In on the Main Projects

Bravada has approximately a dozen projects in its asset portfolio, and while all those projects seem to have their own merit for being part of the portfolio, we will just highlight two of them. The Highland project is the project OceanaGold will be spending its money on, while Bravada Gold will use the cash from the recently upsized private placement to drill its SF project.

Highland

We will discuss the joint venture terms with OceanaGold later in this article, but there are some very good reasons why OceanaGold was so keen on securing a right to earn into the Highland property in Nevada.

The project does have a rich history, as the first gold occurrences were discovered in the early 1900s, which was followed by a short period of gold production wherein just a handful of ounces were produced right before the Second World War started.

But what mainly attracted Bravada (and its joint venture partner OceanaGold) to this project is the sinter-based exploration theory.

Sinter zones (high silica rock) are formed by hot springs and have been encountered along ancient surfaces on top of some existing gold deposits (which are “hidden” underground and sometimes remain completely undetected). Those sinters usually do not “contain” gold, which has been “left behind” as the fluids made their way to the surface. So if you’d complete a sampling program of the sinter zones, the assay values wouldn’t be too exciting.

( Companies Mentioned: BVA:TSX.V, OGC:TSX; OGC:ASX, )