Veteran investor Bob Moriarty provides an update on Nexus Gold’s potential home runs in Burkina Faso.
I wrote about the incredible coup that Nexus Gold Corp. (NXS:CVE) scored in Burkina Faso back in early December. Basically they have picked up two potential home runs in the best country to explore and build a mine in, in the entire continent. Using the skills of the former Chief Geologist for Roxgold, Warren Robb, the company managed to scarf up two good properties for about US$1.5 million each but the deals are rear end loaded and have a tiny 1% NSR. They have two years to test the crap out of the projects before big bucks are due so the money they raise now goes directly into the ground rather than into the landowner’s pocket today.
One thing I have learned over the last fifteen years and seeing hundreds of projects is that the interests of the landowner and the company doing the deal have to align. In 100% of the cases I’ve seen where a big front end payment is made, the landowner immediately does everything in his power to queer the deal so he can go flog the property to some other damned fool. In Tanzania I’ve seen one project with a lot of gold in the ground get pimped out to four different groups in five years. The landowner realized he could make a lot more money on front end payments than from actually producing gold.
On January 11th, Nexus Gold published a press release detailing some of the best results from the initial RAB program and grab samples. So far there have been 556 test pits, and 11 trenches sampled with nice numbers coming up. Rock samples done before the deal was concluded came back with …read more