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Promising gold play Nova Minerals (ASX:NVA): Interview with CEO Chris Gerteisen

May 19, 2023

Nova Minerals, NVA

Nova Minerals (ASX: NVA)

We spoke to Chris Gerteisen, the CEO of the gold explorer Nova Minerals (ASX: NVA), about his company’s opportunities in Alaska’s highly prospective Tintina Gold Belt and the massive 9.9 million ounce resource Nova has established in its flagsheip Estelle Gold Project.

As Gerteisen explains, development of Estelle is not without its issues, but the Scoping Study suggests hundreds of millions of dollars in future shareholder value if Nova can exexute well.

Full transcription below.


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Stuart: Hello, and welcome to “Stocks Down Under.” My name is Stuart Roberts, and I’m one of the co-founders of our service. And joining me on the afternoon of the 18th of May, 2023 is Mr. Chris Gerteisen, who’s the CEO of Nova Minerals, ASX:NVA. Chris, good evening for you. You are in Palmer, Alaska, and it’s still Wednesday over there, where it’s Thursday here.

Chris: That’s right. Great to be with you today, Stuart. That’s right, it’s the midnight sun. This is the time of year, so it’s still daylight out at 9:30 in the evening. So, it’s an exciting time of year.

Stuart: Now, for those folks who’ve never been to Palmer, Alaska, dig out your atlas now, and find the city of Anchorage. Go about 40 miles north, and you’re in a borough, they call ’em boroughs in Alaska. Matanuska sutisa… I can’t pronounce it. Chris, where the heck are you?

Chris: So, the full name Matanuska-Susitna Borough, which is native names, but we just call it Mat-Su.

Stuart: Mat-Su. Right. Okay. Yeah. Sarah Palin’s, almost your neighbor. She’s about five miles away at a place called Wasilla. At least she was back in the day. So, we’re kind of not necessarily in the middle of nowhere, because it’s about an hour’s drive to get to Anchorage, right?

Chris: Correct. And actually, the Mat-Su Valley here, so we have, Wasilla and Palmer are the main towns here. Fastest growing region population growth in Alaska at the moment. In the whole borough, about 60,000 people.

Stuart: Right, right. Now, the reason we’re talking about Alaska is your company, Nova Minerals, has now hustled up a [inaudible 00:01:49] 2012 resource in its Estelle project in the magnificent Tintina gold Belt of Read and Weep folks, 9.9 million ounces. Chris, how the heck did you manage that? That is an enormous… That’s a monster of a resource. And I suspect you’re not finished yet.

Chris: That’s right. We’re just getting started. So, we started, it’s been a, if not unique, certainly, what we have achieved here is very rare in the world, certainly today these days. So, we started in earnest with our first drilling program in 2019 at our Corbel deposit. And the maiden resource there came back above and beyond even what we expected, 2.5 million ounces maiden resource at Corbel. On that basis, we were all in. And so, in three and a half short years later, where we stand here today, we’ve defined now 9.9 million ounces, almost 10 million ounces, at two deposits that would be at Corbel, which is our bulk minable, bulk tonnage deposit, almost a billion tons there.

And then what’s become the jewel in the crown at our RPM deposit, very high-grade deposit there. Now, those are the two deposits we’ve defined currently resources on. Inside that 9.9 million ounce global resource is 3.4 million ounces of measured and indicated status. A majority of that measured and higher confidence material is down at RPM in that higher [inaudible 00:03:16.126] material. But in addition to those two deposits, we have 20 other known prospects at various stages of advancement across the claims.

And the next cab off the rank is our train prospect, which is an RPM style target, very nearby RPM, and we intend to drill that this year here in the coming weeks, first drill holes into that to establish a third resource across the Estelle project, which should, if we can get enough drill holes into that, and get a maiden resource on it, finally propel us over that 10-million ounce target for the global resource.

Stuart: Right. And the good news for you, and I think it’s a misunderstood part of the story. There are parts of Alaska that are seasonal. You can’t drill there, say, in the spring, for example, because it’s difficult to move rigs in. Not your problem, you can work all year round, right?

Chris: We’ve worked all year round. Yeah. So, I mean, the challenge… So, the challenges with working in the winter, I mean, I recognize some of your listeners are in warmer climates, and they’re not used to this type… But yeah. So, we’re Alaskans, we’re used to the winter. We operate, we still work and play in the wintertime. And so, what the challenges are in the wintertime is that it is a bit more expensive to operate in terms of keeping things that… Lines when you’re drilling for… Thaw it out, and they’re freezing.

And so, it is a bit more expensive. And so, we try to avoid, if we don’t have to, drilling through the months of December, January, or February, however, we’ve done it in the past. And what that requires is you don’t start a drilling program in the winter, you prepare for it so you can go through the winter, and drill through the winter. With the proper preparations, it’s all doable. And we’ve proved that, and many other projects still do that as we speak.

Stuart: Now, I’ll ask around, some of the critics of this company will say, “Look, Estelle’s great, but it’s a stranded asset.” There’s no actual way to get stuff in and out easily other than through airplanes. Because you’re 100 miles as the crow flies, but it’s fairly mountainous. There’s no road. Now, the good news is that the state legislature’s already signed off, and they’re doing the environmental studies on a road, which will make that area very accessible. Tell us about that.

Chris: Correct. So, just on the geography, so, from Anchorage or Port Mackenzie, the deep-water port there across from Anchorage, out to the Estelle Gold Project, there’s a proposed West Susitna Access Road project. Over 80% of that route is across a perfectly flat valley. And it’s at the very end that you start to come into the mountains where we are. Right? So, maybe that last 15% actually comes into the mountains and we’re just there on the edge of the mountains. And so, that project now is gaining major momentum. Widespread support across the spectrum of society here in Alaska.

The state of Alaska has funded that with $8.5 Million for the EIS process, which is happening now. In addition to that, the local government, the local Mat-Su bureau is on board, very supportive of the project. There’s several community groups. The friends of the West Susitna, to name one, friends of the are community members, just citizens that are proponents of the road. Because there’s many benefits. We’re just one of many beneficiaries along that road. That economic corridor has so much for Alaskans, including resource projects.

We’re one of many out here in the West Susitna Mining District. Also, your everyday Alaskans wants to get out there and do their recreation, they’re fishing, they’re hunting on the, along the way. Agribusiness, there’s so many economic benefits that come with a road, of course. And so, the schedule is for this road is currently the state schedule, 2025 to break ground on the road, and have that road open for business by 2028. And our schedule for the project is now lining up with that to be able to…on our path to production that when that road is open for business, we’re ready to go as well. Now, in the meantime, in terms of access, you mentioned airstrips. Yes, we currently support the project with a 4,000-foot airstrip here at site. So, we can bring in very large aircraft.

Stuart: Oh, good. That’ll take a DC3 in that, right?

Chris: That’s right, absolutely, DC3 in there. Also, in the wintertime, which we just ended that season now, we utilize a winter road from a 100-mile Winter Road. This is how we bring in our heavy equipment, our drill rigs, all these kind of things. Very common in this part of the world. In fact, the latest project to construct and operate a mine on a winter road is Sabina up there much farther north of the Arctic Circle up there. None of it in Canada. And so, very common… There’s television shows about this stuff, Stuart, the Winter Road. So, that’s what we utilize, we believe we could… So, that’s what we use. Nevertheless, we’re waiting for this all-year, all-Weather Road, the West Susitna access road to come online, which fits our project schedule perfectly. And that looks like it’s moving forward now.

Stuart: Right. You’ve done a scoping study on Estelle, and it’s pretty exciting. So, about 380 million in pre-production CapEx gets you about 650 million at an NPV using a discount rate of 5%. So, internal rates return 53% payback time, 11 months. So, the economics are great, but this is just a scoping study. I suspect there’s, there’s better numbers coming the next time you crunch them a little more carefully.

Chris: Indeed. Indeed. Yeah. So, this isn’t the end, this is just the beginning. What this scoping study has allowed us to do, and just going through the whole process, give us a greater understanding of the project sensitivities. And now, we can hone in on these items we’ve identified in the scoping study to only have those economic metrics improve. And so, what that includes is, so that 11-month payback period is just exceptional. And we get that mainly because of this high-grade bonanza zone at the RPM deposit. But over the life of mine, the average mill feed grade is like 0.7. Even the slightest increase in that average mill feed grade from 0.7 to 0.8 over the life of mine, adds another 250 million to the project NPV.

So, that’s very achievable to start pushing up that average mill feed grade. We have those targets readily available, and we’ll be drilling those in the weeks and months to come here as we move into our drilling season.

Stuart: Let’s talk a bit about the neighborhood. So, Tintina Gold Belt wasn’t something they talked much about when I was first following gold in the ’90s. In fact, geologists invented the term to describe that massive 1,000-kilometer belt. What characterizes mostly is [inaudible 00:10:17] intrusive systems. But you and I are talking, before we pressed the button, that’s just one kind of gold [inaudible 00:10:24.939]. There’s other metal that’s down there even on your properties.

Chris: Indeed. So, in terms of the gold deposit, that’s right. This is the home, this is the type area for the intrusive related gold systems to name a few. Probably the type deposit that’s been around for the longest in terms of mining is Ken Ross, Fort Knox deposit up there in Fairbanks. They’ve been going for 25 years, over 10 million ounces there. Victoria Gold on the Yukon side at Dublin Creek… At Dublin Gulch, very successful recent startup there. So, 10 million plus ounce deposits, not uncommon in our neighborhood. And that’s certainly what we’re onto here at Estelle.

Oh, also, Pogo, Northern Star. There’s Australian company. So, that’s the gold deposits. In addition to that, there is potential here for porphyry copper-gold deposits as well as polymetallic systems. Now, why do I say that? Our neighbor, the Whistler Gold Project, U.S. Gold Mining Inc., has a porphyry copper-gold deposit there that’s a recent IPO, successful IPO. And also, we also have a prospect that we’ve already discovered called the Stony Prospect, and we intend to do additional exploration out there this year. The main stony vein, we can trace that over 3 kilometers and strike, 10 to 12 meters in width. And we get not only high-grade gold there, up to 48 grams per ton, but thousands of grams per ton silver, and up to 2.4% copper in that main stony vein.

And then in addition to that, we see parallel veins popping up on either side. So, we intend to follow those up. So, we call it a polymetallic-stacked vein system. Now, we’ve been concentrating on the gold being a gold company, but as we move forward, we’ll be starting to go out to those polymetallic and porphyry targets as well in the years to come.

Stuart: This project is more and more exciting. Now, you mentioned Northern Star and Pogo a second. Let’s stay on the Northern Star theme. You’re actually one of us in spite of the accent, you carry both Australian U.S. passports, as I understand. And that’s by virtue of the fact that you did your masters in mining at the Western Australian School of Mines in Kalgoorlie. You told me at one stage, you worked on what became Carosue Dam, amongst other things when you were working for Newmont out here. Carosue, I should say, Carosue Dam.

Chris: Carosue Dam. Yeah, that’s right. Reborn and rebred in Kalgoorlie Western Australia, Stuart, that’s correct. Good times. Yeah. So, Carosue Dam, I was on the original team that we discovered that and did the resource drill out there at Carosue Dam and brought that into production. And I can see that. And that was with a company called Pacman back in those days, and then Sons of [inaudible 00:12:59] took us out, and long story short, but I see that Northern Star has taken that over and they’re going underground. They’re now as well.

So, that’s very good to see. But yeah, that was with my experience there in Australia. In addition to that, I’ve worked with many Australian companies. I was on the original team that brought Oxyana [inaudible 00:13:19] and Laos into production and worked with PanAust up there in Laos as well at Phu Kham, and then we discovered the Ban Houayxai silver-gold deposit. So, that’s right. I hold dual citizenship, and as well, I’ve worked with a lot of Australian companies, so we’re compatriots.

Stuart: Well, absolutely. And you’ve gotten around. I mean, you started your career in those magnificent Carlin Trend mines down in Nevada that Newmont have been pioneering since the 1960s. Newmont took you to [inaudible 00:13:48.099] to work on [inaudible 00:13:48]. So, you’ve worked on many different mineralization styles and many different kinds of projects in your time.

Chris: Yes, very large scale. You mentioned Carlin, you mentioned [inaudible 00:14:00], very large-scale complex mining scenarios in large scale. And that’s why when I… At the end of the day, now that I’ve come full circle, and I’ve come back home to Alaska where I originate from, and I’ve saved the best for last with Estelle, you sit back at the end of the day, and you look at what’s happening here, what’s going on? Now, certainly, the geology’s different, but in terms of scale and potential resource endowment, I see a Carlin trend developing. That’s why we call it the Carlin of the North. It’s a gold trend. We’ll be out here for decades, and decades as we continue to advance these prospects that we have, the resources, and build on that global resource, prove them up, and eventually, get these into production.

If already, we see potentially two mining centers, potentially two mining centers, one in the north area at Corbel [SP], one down at RPM. Now, how that plays out, which one comes on [inaudible 00:15:01], whether they come on at the same time when we eventually come to construction, I don’t know yet. Let the PFS and the DFS decide that. But certainly, there’s two areas already for gold. And then we talked about the middle area with the Polymetallic system. So, this is what I’m saying in terms of it’s a trend, the Estelle Gold trend, it’s a district play. It’s not just a one-hit-wonder.

Stuart: And it’s fair to say, if you go back in time, no one understood the Carlin trend properly. It required some clever geology by your old bosses at Newmont to figure out that these vast low-grade trends were actually the base of [inaudible 00:15:35]. We’re gonna discover something not dissimilar to that although in different kinds of geological setting up where you are.

Chris: That’s absolutely correct. The Carlin Trend was revolutionary in terms of low-grade bulk tonnage heap leaching, and these type of things. And so, these were the company makers, the Carlin Trend company makers for companies like Newmont, Barrack, that’s where these companies came from, right? That’s where these companies came from. Those made tier-one top goal producers in the world. They built their business on deposits like the Carlin Trend, and very bulk tonnage deposits, which is certainly what we have here at Estelle.

And again, mine life, it’s all about mine life, something you can support and have that cash flow in the company for decades and decades to continue to grow. And so, that’s the big picture, the big vision certainly for Nova.

Stuart: Right. And the other great thing in your favor, it’s Alaska is a two-one mining jurisdiction Red [SP] Strait, very pro-development under Governor Don Levy. And in your case, you get an extra advantage. You’re on state land, so you’re not having to go negotiate with First Nations groups or any of that other stuff, right?

Chris: Such an important point, Stuart. Absolutely. So, that’s right. State land, no federal land, no native corporation land to deal with. Just to be clear, in Alaska, we don’t have native title as such like you have in… The dynamics aren’t the same in terms of like how you have in Australia and Canada. Native corporations have their own land already been allocated. In fact, they’re very pro-development as well. They have business conglomerates, they have drilling companies. Very successful corporations. But yes, so we’re all on state land.

And what that means is that on a day-to-day basis, just operating very pleasant, just working with state permitting agencies, resource economy, they’re so supportive of the project. Then when it comes to permitting, it’ll be a much more streamlined process dealing mainly with state agencies. And so, that works in our favor. That’s a huge bonus for these resource projects. And so far, so good. And the state has been very, very supportive. Yes. All on state land. Not only the project but also the West Susitna access road, which we discussed.

Stuart: Right. Now, I’ve got my magnifying glass here, and I think we need that to see the market cap of Nova. I get the sense the market’s mispricing the Estelle opportunity in a big way. Let’s talk about that. You’ve got about 21 million cash at the most recent quarter. Nova also owns a big slab of a NASDAQ-listed lithium play called Snow Lake, which wants to develop a lithium project in Manitoba. When you take all those out, we’re valuing a 10-million-ounce deposit or thereabouts at a mere $20 million Australian, which is in this kind of scale at the moment, right?

Chris: That’s correct. So, to put that in perspective, I believe the market cap is hovering around 60, 70 million Aussie currently.

Stuart: Yep. Yep, yep.

Chris: We own 37% of Snow Lake resources, which is a NASDAQ-listed company hovering around 40 to 50 million U.S. So, take all that out of it, the Estelle Gold Project is perhaps, the valuation is 20 to 30 million for 10 million of ounces of gold. Now, what’s the reason for that? Very frustrating, very challenging. What’s the reason for that? Underappreciated, undervalued, certainly. Now that we’re moving into… You’ve seen the scoping study results $650 million NPV, 53% internal rate of the return, 11-month payback on a 17-plus year mine life project that’s only getting started here.

So, we’re moving into the drilling season now, that’s set to commence here in the weeks to come. We’re doing the preparation work now, and so, we expect news flow to have additional drill results at RPM, the main focus, as well as that train, that third resource that we’ll be drilling this year. And so, news flow to come, and in a rising gold price environment, we think there’s definitely an opportunity here. Directors have been buying, it’s a good opportunity in the near medium, and long term with all the exciting things happening that we discussed today, I feel. But yes, it’s been very frustrating. I think we’re underappreciated, but once people understand the story, I believe that there’s a good opportunity here with Nova Minerals.

Stuart: I mean, look, if you’re seeing this video now, and you’ve just fast-forwarded in the future, I’ve got some news for you, golds rerated to $2,000 U.S. an ounce. So, that will and truly covers the… I think your AISC for Estelle on the scoping study was about 1,150, Chris, did I read that correctly?

Chris: Correct. So, payback period is about 520 life of mine, [inaudible 00:20:36.037] 1,150. At the current gold price, actually, the NPV approaches, I think, it’s $1 billion, I believe.

Stuart: Right. Right. There you go. Huge opportunity that the market is rerating at the moment. Investors ought to go take a look. So, Chris, good luck and God’s speed in terms of the next drilling campaign that you’re just about to initiate shortly. And thanks for talking to “Stocks Down Under.”

Chris: Absolutely. Great to be with you. Keep us on your radar. News flow, coming with drill results.