NSGold’s (NSX – $0.27) Mexican silver assets have been spun-out into a new publicly traded Company called NSX Silver Inc (NSY – $0.25), which also trades on the TSX Venture Exchange.
Management’s first goal of creating more shareholder value with the spin-out has already been reached. NSGold’s closing price on Tuesday, the last day before the spin-out, was $0.46. Now, the two shares combined closed at $0.52, or 13% higher compared with Tuesday evening.
In other news, NSX Silver announced that it started the first drill campaign at Dios Padre to test several high potential gold-silver-copper zones, which were identified during a ground-based geophysical survey late last year.
Drilling Commenced at Dios Padre
In November and December of 2011, a geological survey was conducted at the Dios Padre silver property in Sonora, Mexico. It included a geochemical rock sampling program, a ground-based 3D Induced Polarization geophysical survey and a magnetic survey.
Analysis of the survey results identified seven very interesting anomalies at the property. The first anomaly was logical, as it was the Santa Gertrudis open pit, which was the focus of historic mining activities at Dios Padre, and for which the Company targets to get a resource estimate of at least 60 million ounces of silver.
Four other surface anomalies contained high values of copper, gold, silver and arsenic (a pathfinder element in gold exploration), while one other was found to be a massive lead sulfide zone.
Finally, the geophysical survey also revealed a very large conductive anomaly of 600 metres wide by 800 metres long with a depth of at least 300 metres, which is the limit of the effective range of the survey method. This mass lies just to the north of the most recent historic mining operations and obviously represents a prime target.
Seven holes, totaling 2,000 metres, will initially be drilled to test these areas. The drill program commenced this week and first results are expected in April.
After the first seven holes are completed, thirty more will be drilled, totaling approximately 8,000 metres. In this phase, the focus will be on the Santa Gertrudis open pit and on the above mentioned anomalies which returned promising results during the initial drill phase.
The active management style is clearly paying off. One of the main reasons the management of NSGold decided to spin-out its silver assets was because the share price of NSGold at the time only reflected its cash position and its Nova Scotian assets, which made it difficult to execute corporate transactions at a fair price.
The two stocks combined are up 13 percent since the spin-out and even 24 percent YTD. And judging from one sentence in this week’s Letter to Shareholders, we presume there’s already a new corporate deal on the horizon for NSGold.
We look forward to the first analytic results in April and especially to the ones from the large conductive anomaly of 600 by 800 metres. When drill results confirm that Dios Padre is in fact the high potential property that it is believed to be, shareholders stand to benefit in a big way.
By the way, we have an interview scheduled with Hans van Hoof, the President and CEO of both NSGold and NSX Silver. We’ll make sure to ask him about his plans and the upcoming milestones for both Companies. We’re also laying the final hand on a Company Report for each Company.
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