It has been quiet for a while, since Westward Gold Inc. (WG.CSE) released the results of their first deep confirmation hole at their flagship Toiyabe project in Nevada on May 23, 2023. The company used the positive outcomes (12.7m @ 1.01g/t Au from 556.4m aren’t economic in itself but are very important vectors for analogous deposits like Cortez Hills, being hosted in the same type of host rocks) to return to the markets, and raise fresh cash for a follow-up drill program. Initially Westward was looking to raise C$600k, but certain big names found out and wanted a piece of the pie as well, resulting in another C$404k, much to the delight of management which worked tirelessly in the current difficult market for anything besides lithium projects.
All pictures are company material, unless stated otherwise.
All currencies are in US Dollars, unless stated otherwise.
Please note: the views, opinions, estimates, forecasts or predictions regarding Westward Gold’s resource potential are those of the author alone and do not represent views, opinions, estimates, forecasts or predictions of Westward or Westward’s management. Westward Gold has not in any way endorsed the views, opinions, estimates, forecasts or predictions provided by the author.
The closing of the non-brokered financing was announced on August 1, 2023, after announcing it on June 26, 2023 and upsizing it on July 10, 2023. Westward issued 8.68M shares @ C$0.12 with a full two year warrant (C$0.18 exercise price), for gross proceeds of C$1.04M. The warrants have an acceleration clause as well, providing the company treasury with additional cash in the case of trading over C$0.35 for at least 10 consecutive trading days. It was good to see that certain insiders took up some more shares (800k shares), among those were CEO Colin Moore, CFO Andrew Nelson, Chairman Mark Monaghan, and newly appointed Director Al Fabbro. CFO Nelson was also happy to share with me that existing shareholder Keith Neumeyer bought most of the volume in the market on July 20, when 3.5M shares traded hands in a cross.
He also stated: “We had for the majority HNW investors participating, but some better known names and figures in the industry would be Terry Salman (founder of Salman Partners from 1994-2016 which was a leading resource-based investment dealer, where he raised an aggregate of $20 billion for over 400 exploration and mining companies), one of the co-founders of K92 Mining participated, some of the largest portfolio managers at Haywood Securities joined (including a Mining Finance Hall of Famer), Bill Sheriff, a very well known successful resource entrepreneur (who formerly owned Toiyabe in a previous company) bought in, as well as high up executives at First Majestic Silver.”
That sure is an interesting group of people with long term views. Most of the proceeds from the financing will be used to fund follow-up work from the recent diamond drilling at its flagship Toiyabe Project (about C$500k), some will be used to advance potential accretive M&A opportunities (about C$400k), and the balance will be budgeted for general working capital purposes, including upcoming annual BLM claim maintenance fees (C$125k). An exploration update can be expected shortly, in a nutshell according to management the company is planning to conduct lower cost exploration programs to further define targets, host site visits for major gold producers, and explore creative strategies to fund further drilling (ie. strategic investment from a major, exploration partnership, or potential Joint Venture if the terms are right).
Growing the company via M&A is an important part of Westward’s strategy, as they want to get bigger asap. The reasoning behind this is simple according to CFO Nelson: “When we’re having discussions with institutional investors who want to deploy exploration capital, they’re looking to invest a minimum of $5M into companies. When your company has a market cap of only $5M or $10M (C$9.57M after Friday’s close) this isn’t feasible, as they can’t own 50% to 100% of your company. So by scaling up to become a $20M-$30M company, then these discussions have more merit, and the fund can actually deploy a $5M investment which can fund an aggressive drill campaign”.
It certainly is good to hear Westward has access to that kind of capital. As a reminder, the deep drilling isn’t without a good reason, as the recently drilled gold mineralization below 500m depth has been found in favorable lower plate carbonate host rocks, the type of rock that is host to several 10+Moz Au underground deposits in the region, some of them extending to 1,200m depth.
According to Technical Advisor and Carlin-type expert Steven Koehler, he noticed several similarities with the early stage discovery of the multi-million ounce Cortez Hills and Leeville deposits. According to him, there are compressional tectonics, favorable lower plate carbonate host rocks, pervasive vertical alteration of these rocks combined with extensive oxidation at depth, and of course there is already some gold mineralization. He thinks the hydrothermally altered SSD Zone extends and strengthens to the northeast, and this is where further drilling will focus, preferably widely-spaced step-out drilling, for which permits are already in hand. Koehler also commented:
“The recognition of gold in upper plate rocks above or outboard from gold mineralization in lower plate carbonate rocks in T2301 is reminiscent of geologic patterns in the Carlin Trend north area – especially those gold deposits down-dip from the Carlin and Pete open-pit deposits. The down-dip continuation of the SSD Zone – and its association with favorable carbonate stratigraphy and compressional tectonic features – is similar to the setting of deeper deposits discovered on the Carlin and Cortez Trends.”
When looking at the schematic sections of Toiyabe, it appears that the targeted host rock (Dw = Devonian Wenban) plunges under a steeper angle than previously thought, and is confined by faults.
So the Wenban host rocks seem to plunge steeper to the northeast, but lots of step-out drilling needs to be completed to establish the stratigraphy here. It also needs to be noted that existing large deposits (owned by the likes of Barrick and NGM) start around 200-550m below surface, and extend to 1,200m of depth as mentioned.
Also as a reminder, it is also fascinating to see that Nevada Gold Mines has been all over the Swift project of Ridgeline Minerals via this US$30M earn-in, after just a few verification holes were completed of historic drilling by Ridgeline, which intersected Lower Plate Wenban and Roberts Mountain formations as well, but starting much deeper at 727m and with results much less impressive compared to Westward’s.
It is obvious NGM recognized smoke signals at Swift, with the vast experience they have in the region. As Toiyabe seems to have the same features, Westward management is determined to continue exploring the SSD Zone further to the northeast.
Conclusion
As the first step-out hole T2301 provided Westward’s very experienced Nevada expert geologists with lots of clues for something analogous to nearby large scale gold deposits (the Wenban formation was intercepted, gold was encountered, lots of alteration and oxidation was seen), many high-profile investors took an interest in following up on this pre-discovery, and provided the company with a nicely filled treasury, courtesy of an oversubscribed C$1.04M PP. As Westward is preparing for further exploration at Toiyabe and is looking to acquire more projects, it will be an interesting summer. Will they be able to find more clues for an elephant at depth? Stay tuned!
I hope you will find this article interesting and useful, and will have further interest in my upcoming articles on mining. To never miss a thing, please subscribe to my free newsletter at www.criticalinvestor.eu, in order to get an email notice of my new articles soon after they are published.
Disclaimer:
The author is not a registered investment advisor, and currently has a long position in this stock. Westward Gold is a sponsoring company. All facts are to be checked by the reader. For more information go to www.westwardgold.com and read the company’s profile and official documents on www.sedar.com, also for important risk disclosures. This article is provided for information purposes only, and is not intended to be investment advice of any kind, and all readers are encouraged to do their own due diligence, and talk to their own licensed investment advisors prior to making any investment decisions.
All pictures are company material, unless stated otherwise.
All currencies are in US Dollars, unless stated otherwise.
Please note: the views, opinions, estimates, forecasts or predictions regarding Westward Gold’s resource potential are those of the author alone and do not represent views, opinions, estimates, forecasts or predictions of Westward or Westward’s management. Westward Gold has not in any way endorsed the views, opinions, estimates, forecasts or predictions provided by the author.
The closing of the non-brokered financing was announced on August 1, 2023, after announcing it on June 26, 2023 and upsizing it on July 10, 2023. Westward issued 8.68M shares @ C$0.12 with a full two year warrant (C$0.18 exercise price), for gross proceeds of C$1.04M. The warrants have an acceleration clause as well, providing the company treasury with additional cash in the case of trading over C$0.35 for at least 10 consecutive trading days. It was good to see that certain insiders took up some more shares (800k shares), among those were CEO Colin Moore, CFO Andrew Nelson, Chairman Mark Monaghan, and newly appointed Director Al Fabbro. CFO Nelson was also happy to share with me that existing shareholder Keith Neumeyer bought most of the volume in the market on July 20, when 3.5M shares traded hands in a cross.
He also stated: “We had for the majority HNW investors participating, but some better known names and figures in the industry would be Terry Salman (founder of Salman Partners from 1994-2016 which was a leading resource-based investment dealer, where he raised an aggregate of $20 billion for over 400 exploration and mining companies), one of the co-founders of K92 Mining participated, some of the largest portfolio managers at Haywood Securities joined (including a Mining Finance Hall of Famer), Bill Sheriff, a very well known successful resource entrepreneur (who formerly owned Toiyabe in a previous company) bought in, as well as high up executives at First Majestic Silver.”
That sure is an interesting group of people with long term views. Most of the proceeds from the financing will be used to fund follow-up work from the recent diamond drilling at its flagship Toiyabe Project (about C$500k), some will be used to advance potential accretive M&A opportunities (about C$400k), and the balance will be budgeted for general working capital purposes, including upcoming annual BLM claim maintenance fees (C$125k). An exploration update can be expected shortly, in a nutshell according to management the company is planning to conduct lower cost exploration programs to further define targets, host site visits for major gold producers, and explore creative strategies to fund further drilling (ie. strategic investment from a major, exploration partnership, or potential Joint Venture if the terms are right).
Growing the company via M&A is an important part of Westward’s strategy, as they want to get bigger asap. The reasoning behind this is simple according to CFO Nelson: “When we’re having discussions with institutional investors who want to deploy exploration capital, they’re looking to invest a minimum of $5M into companies. When your company has a market cap of only $5M or $10M (C$9.57M after Friday’s close) this isn’t feasible, as they can’t own 50% to 100% of your company. So by scaling up to become a $20M-$30M company, then these discussions have more merit, and the fund can actually deploy a $5M investment which can fund an aggressive drill campaign”.
It certainly is good to hear Westward has access to that kind of capital. As a reminder, the deep drilling isn’t without a good reason, as the recently drilled gold mineralization below 500m depth has been found in favorable lower plate carbonate host rocks, the type of rock that is host to several 10+Moz Au underground deposits in the region, some of them extending to 1,200m depth.
According to Technical Advisor and Carlin-type expert Steven Koehler, he noticed several similarities with the early stage discovery of the multi-million ounce Cortez Hills and Leeville deposits. According to him, there are compressional tectonics, favorable lower plate carbonate host rocks, pervasive vertical alteration of these rocks combined with extensive oxidation at depth, and of course there is already some gold mineralization. He thinks the hydrothermally altered SSD Zone extends and strengthens to the northeast, and this is where further drilling will focus, preferably widely-spaced step-out drilling, for which permits are already in hand. Koehler also commented:
“The recognition of gold in upper plate rocks above or outboard from gold mineralization in lower plate carbonate rocks in T2301 is reminiscent of geologic patterns in the Carlin Trend north area – especially those gold deposits down-dip from the Carlin and Pete open-pit deposits. The down-dip continuation of the SSD Zone – and its association with favorable carbonate stratigraphy and compressional tectonic features – is similar to the setting of deeper deposits discovered on the Carlin and Cortez Trends.”
When looking at the schematic sections of Toiyabe, it appears that the targeted host rock (Dw = Devonian Wenban) plunges under a steeper angle than previously thought, and is confined by faults.
So the Wenban host rocks seem to plunge steeper to the northeast, but lots of step-out drilling needs to be completed to establish the stratigraphy here. It also needs to be noted that existing large deposits (owned by the likes of Barrick and NGM) start around 200-550m below surface, and extend to 1,200m of depth as mentioned.
Also as a reminder, it is also fascinating to see that Nevada Gold Mines has been all over the Swift project of Ridgeline Minerals via this US$30M earn-in, after just a few verification holes were completed of historic drilling by Ridgeline, which intersected Lower Plate Wenban and Roberts Mountain formations as well, but starting much deeper at 727m and with results much less impressive compared to Westward’s.
It is obvious NGM recognized smoke signals at Swift, with the vast experience they have in the region. As Toiyabe seems to have the same features, Westward management is determined to continue exploring the SSD Zone further to the northeast.
Conclusion
As the first step-out hole T2301 provided Westward’s very experienced Nevada expert geologists with lots of clues for something analogous to nearby large scale gold deposits (the Wenban formation was intercepted, gold was encountered, lots of alteration and oxidation was seen), many high-profile investors took an interest in following up on this pre-discovery, and provided the company with a nicely filled treasury, courtesy of an oversubscribed C$1.04M PP. As Westward is preparing for further exploration at Toiyabe and is looking to acquire more projects, it will be an interesting summer. Will they be able to find more clues for an elephant at depth? Stay tuned!
I hope you will find this article interesting and useful, and will have further interest in my upcoming articles on mining. To never miss a thing, please subscribe to my free newsletter at www.criticalinvestor.eu, in order to get an email notice of my new articles soon after they are published.
Disclaimer:
The author is not a registered investment advisor, and currently has a long position in this stock. Westward Gold is a sponsoring company. All facts are to be checked by the reader. For more information go to www.westwardgold.com and read the company’s profile and official documents on www.sedar.com, also for important risk disclosures. This article is provided for information purposes only, and is not intended to be investment advice of any kind, and all readers are encouraged to do their own due diligence, and talk to their own licensed investment advisors prior to making any investment decisions.
