NxGold hunts for gold near Meliadine

VANCOUVER — NxGold (TSXV: NXN), a company founded by management of uranium explorer NexGen Energy (TSX: NXE; US-OTC: NXGEF), is preparing to explore for structurally hosted gold mineralization at its Kuulu project, located along a geological trend of Agnico Eagle Mines’ (TSX: AEM; NYSE: AEM) 3.4 million oz. gold Meliadine gold project in Nunavut, west of Hudson Bay.

NxGold — unrelated to Brazilian gold junior NX GOLD S.A. — is planning a 4,000-metre, 30-hole drill program to probe beneath a number of newly discovered gold-rich quartz float at surface, along with a test of magnetic geophysical anomalies that occur across the 41.7 sq. km property.

NxGold’s Kuulu gold project is 20 km northwest of Agnico Eagle Mines’ Meliadine gold project and 45 km northwest of Rankin Inlet, Nunavut. Credit: NxGold.

Property-wide geophysical surveying — including a slow flying drone magnetic survey — and additional reconnaissance work would also be conducted.

“Through the work that NexGen has been doing, and the success we’ve had at Arrow, we’ve attracted quite the following in the market,” Christopher McFadden, NxGold’s president and CEO, and cofounder of NexGen, says of NxGold. “One of the transactions NexGen did came with a shell company, and it was basically sitting in the portfolio looking for something to do. So when Kuulu was presented to us as an opportunity, we decided it was a great way to revitalize that shell.”

The Kuulu property is cut in half by a large fault named Dickson-Pyke that separates a folded package of volcanic and meta-sedimentary rocks in the east, called the Eastern Fold Structure (EFS), from metamorphosed intrusives and granitic rocks in the west, grouped together as the Western Magnetic Linears (WML).

Prospecting at NxGold’s Kuulu property has outlined clusters of high-grade gold boulders down-ice of prospective geophysical signatures. The targets will be subject to a 4,000-metre drill program this year. Credit: NxGold.

Exploration work conducted in 2015 and 2016 narrowed down the potential source of quartz-rich boulders and float material in the EFS to three broad areas, Hinge, RB and GD. Nine of the 20 angular quartz vein float samples collected in these zones assayed greater than 1 gram gold per tonne, with highs of 16.8 and 38 grams gold.

In the WML, magnetic lineaments vary from 1 to 4 km long and correlate to broad halos of gold-rich boulders at surface. Fifteen of the 51 angular quartz float rock samples collected from these zones returned greater than 1 gram gold with highs of 27, 65 and 451 grams gold.

“The success that Agnico has enjoyed at Meliadine is what makes Kuulu exciting, McFadden says. “It’s right next door to their project, and only 40 km from Rankin Inlet, so from a geological and an infrastructure perspective, it’s very well located.”

Under an agreement signed with private company Meliadine Gold in October last year, NxGold can earn a 50% interest in the property by spending $10 million over three years, and up to a 70% interest by spending an aggregate of $25 million and delivering a bankable feasibility study.

McFadden says NxGold is well funded to undertake exploration this year, having completed a $4.9-million financing in January, which issued 19.8 million units at 25¢ per unit. Each unit consists of a share and half a warrant exercisable within three years at 50¢ per whole warrant.

“NxGold is a separate entity from NexGen, but it has the same DNA in terms of how it operates and undertakes exploration,” McFadden adds.

Some of the money will be used to begin work on NxGold’s most recent acquisition, the Chicobi gold project, which it acquired from private company Kenorland Minerals in April.

The Chicobi property covers 600 sq. km in Quebec’s portion of the  Abitibi gold belt, and encompasses a 70 km strike length of a deformation zone largely untouched by explorers.

“Companies tend to go for the low-hanging fruit first, and Chicobi doesn’t have any. There’s no outcropping mineralization that can be seen, it’s just forests and swamps,” McFadden says. “All the easy stuff in the Abitibi has been found and now we have to look a bit harder, and perhaps challenge some of the models and processes that have been used in that area in the past. We hope to bring a fresh pair of eyes into the region.”

Shares of NxGold have traded in a 52-week range of 25¢ to 72¢, and closed at 45¢ at press time. The company has 37 million shares outstanding for a $16.7-million market capitalization.