Featured Company / Northern Lights Resources

Nevada is most famous for two things: Las Vegas casinos and mining, two things that just so happen to be able to make a person extremely wealthy with some skill and a little luck.  Nevada mining may conjure up thoughts of gold – and rightfully so – but the state also has plenty of other metals, like silver and base metals that will continue to add to the state’s rich history.

While gold will forever be in fashion, there is rising interest in metals like copper, zinc, iron and tungsten owing to rising demand for electric vehicles and urbanization, as cities across the planet continue to expand.  Conversely, many base metals have taken a hit recently because of concerns that trade tensions between the U.S. and China will dampen global economies and keep a lid on demand. 

That has put some pressure on the value of base metal companies and created investment opportunities.  After all, the trade spat isn’t going to last forever and what will happen will be an explosion in pent-up demand.

Mine targets abound Nevada, but that’s not the only reason explorers and developers jump at the chance to work in the state.  Zero income tax, low net profit tax, world-class infrastructure and some of the most mining friendly regulations in the world add to Nevada’s appeal.

It is with good reason that the list of companies mining or exploring in Nevada reads like a “Who’s Who” in metal resources.  Kinross (NYSE:KGC)(TSX:K), Barrick (NYSE:GOLD)(TSX:ABX), Newmont Goldcorp (NYSE:NEM)(TSX:NGT), McEwen (NYSE:MUX)(TSX:MUX), SSR Mining (NASDAQ:SSRM)(TSX:SSRM), Anaconda (OTC:ANXGF)(TSX:ANX) and Nevada Copper (OTC:NEVDF)(TSX:NCU) are but a smattering of the companies with operations in the state.

One of the newest public players in Nevada is Northern Lights Resources (CSE:NLR), which came public at the end of October concurrent with closing a private placement that raised C$1.1 million for its exploration efforts.

In August 2017, the Vancouver-based company acquired its flagship asset, the Medicine Springs silver/zinc lead project in Elk County, Nevada.

Medicine Springs is a 1,206-hectare project that has a history of producing to the tune of 160 tonnes of lead (Pb), 800 kilograms of zinc (Zn) and 500 kilograms of silver (Ag) from numerous surface and underground mine workings between 1910 to 1956.

Northern Lights holds an option to acquire a 100% interest in the Medicine Springs project by spending a total of US$2.7 million on project expenditures and payments to vendors totaling US$950,000 in cash and US$250,000 in equity over a 6-year term.

Exploration during the 1990’s made many significant silver-lead intercepts that are part of a NI 43-101 report on file with Sedar.  Mapping, surface sampling and ionic soil surveys defines a mineralized footprint 3,400 meters in length and up to 1,400 meters in width open along strike. Additionally the ionic soil survey has defined Carlin gold targets in the southern part of the property near the historic Silver Butte mine workings.

Historic drilling of 125 reverse-circulation holes intercepted high-grade silver in excess of 200 g/t (grams per tonne).  Surface rock and soil samples reinforced the presence of high-grade silver with finds up to 448 g/t Ag.

Other key highlights from the historic drill results data were intersects as high as 18% Zn and 36 g/t Ag over 5 meters and 7% Zn, 4% Pb and 114 g/t Ag over 8 meters.

Building on that data, Northern Lights got underway with detailed mapping, geophysics (Aeromagnetics and CSAMT) and geochemical soil sampling programs between September and November last year.  Investors are on the lookout for the pending results from the geochemistry survey.

As it stands, the data suggests that the mineralization runs to at least 180 meters in depth and remains open along strike in both directions.  Moreover, the data points to two key exploration targets: 1) a large-scale silver-zinc-lead oxide surface deposit and 2) a large scale zinc sulphide carbon replacement deposit (CRD).  The geophysics work completed in 2018 identified six distinct target zones potentially hosting CRD sulphide mineralization.

Northern Lights’ is aggregating all of the data from their work, plus that of US Minerals Exploration, USAX Cominco and Silver Resources along with GIS data to get the best understanding for drill targets with the goal to one-day commission an open-pit mine.

The location of Medicine Springs is also particularly compelling.  Flanked to the northwest by a litany of big gold mines, the area of the property looks to be an emerging base metal trend with four other base metal projects in the vicinity.

Furthermore, there are some uncanny characteristics shared between Medicine Springs and the Taylor deposit that is part of the Hermosa Project of South32 in Arizona.  Hermosa/Taylor was being developed by Arizona Mining (formerly TSX:AZ) before South32 came in and paid $1.3 billion in cash for the remaining 83% of AZ that it didn’t already own ($1.9 billion valuation) in June 2018 to take full ownership of the greenfield development project.

Most of the comparables are kept to geology nomenclature, such as intense sericite-silica-carbonate alterations and the mineralization being hosted by the same Permian carbonate units that are overlain by Miocene rhyolite and pyroclastics.  Others, such as oxidation at similar depths and a similar sized mineralized footprint are easier for laymen to grasp.  Without going into too much geologist-speak, the point here is that Northern Lights management is definitely wondering if they have a Taylor analogue 900 miles to the north.

Management, which includes former Rio Tinto exec Jason Bahnsen as CEO and Gary Artmont, former Chief Exploration Geologist for Freeport McMoran Indonesia as Head of Geology. Gary believes the project has excellent potential to host a large tonnage, lead zinc silver deposit that is open pittable with a low strip ratio. The potential for this area has been confirmed by the results of the recent ionic geochemical soil survey which has defined a large significant lead zinc and silver anomaly measuring 900 meters in length and up to 300 meters in width.

The company intends to test the target anomalies through a comprehensive 5,000 meter drill program with approximately 2,800 meters scheduled for drilling this field season.

That makes it worth mentioning that Northern Lights has a market capitalization of approximately C$1.8 million.  It’s also notable that the company is debt-free and that management and insiders have plenty of skin in the game, holding about 25% of the outstanding shares making the future prospects for this small miner quite enticing.