​Chairman Interview, Albert J. Matter, NuLegacy Gold

Peter Epstein |

The following exclusive interview of Chairman Albert J. Matter of NuLegacy Gold Corp. (TSX-V: NUG) (OTC: NULGF) was conducted in the week ending February 19th. The views, facts, opinions shared by Mr. Matter are entirely his own. Please see disclosure provided by NuLegacy at bottom of page. Albert’s BIO from Company’s February, 2016 Corporate Presentation:

As Chairman of NuLegacy Gold, Mr. Matter will continue developing the Company’s strategic agenda and ongoing business plans while supporting CEO James Anderson’s financing efforts and value recognition programs. [see bios of management team, Board & Technical Advisory Team] Albert has 40 years of diverse experience financing both public & private companies, and structuring / negotiating transactions with particular expertise in the mining industry.

Mr. Matter has provided corporate finance, strategic planning, M&A and business development assistance to numerous corporations and high net worth individuals, frequently working with leading names in the Western Canadian business and investment communities. He is one of the Founding partners of National Gold Corp, (merged National Gold with Alamos Minerals Resources to form the successor company, Alamos Gold Inc) Gryphon Gold Corp and NuLegacy Gold Corp.

All references to grades are for GOLD. All references to potential attributes of the Iceberg deposit are conceptual in nature. Please see links to additional information at bottom of page.

Epstein: Albert, what’s the latest on the Iceberg deposit? Please note near-term catalysts.

AJM: The discovery of significantly higher, nearer-surface zones of oxide gold in the North Zone is a game-changer. The North Zone is open in most directions and represents a potential near-term, ‘starter pit’ development option for us.

Near-term objectives are to complete preparation and report on plans for our 2016 exploration program, in March; commence our drill campaign when ground conditions are optimal, likely in April; enroll a senior miner / investor to finance remaining exploration, likely in May or June; prepare Iceberg’s maiden NI 43-101 resource calculation, likely in August; and achieve a stock price that properly reflects the value that has already been created.

Objectives over the next 12-18 months are to complete the delineation of the Iceberg deposit and capitalize on its value through sale or merger with a capable gold producer.

Epstein: In 2012 when the Iceberg Deposit was discovered, gold averaged US$1,660/oz. Is a resource target of ~100 million Metric tonnes, (Mt) grading between 0.9g/Mt to 1.1g/Mt, that special at US$1,225/oz. gold?

AJM: The Iceberg deposit is special! This 100 million (est.) Mt exploration target was developed in 2013/14. Its potential is being updated to include the 2015 drilling results referenced above. When gold was US$1,660/oz. the cost of producing it was nearly US$1,200, whereas with oil at US$30/bbl., not US$100, steel at 1,400 yuan/ton, not 4,000, & copper at US$2/lb. not US$4, now the cost is nearer to US$750/oz. – especially where are deposit is located, in Nevada’s Cortez trend.

Our drilling costs are 65% of what they were in 2012, and we’re able to get the best drillers, resulting in better productivity, better bang for the buck. We now have 69 holes, as opposed to a single discovery hole. Our confidence level has increased significantly.

One of the ironies of Carlin-type deposits is that difficult drilling, due to highly fractured ground conditions, are the most favorable for the optimum deposition of higher grades. Our crew has been getting good to excellent recovery in these zones. A significant feature of these Carlin-type deposits (in the both the Carlin & Cortez trends) is that once you’ve found one, they’re like the Duracell battery, they keep going and going and going…. [technical commentary on Iceberg deposit]

For example, deposits discovered in the last great exploration cycle of the late ‘80s / early ‘90s initially had resources of 1 to 3 million ounces. They grew to between 5 & 50 million ounces. [Note: See link of Iceberg’s potential, particularly slides # 9 to 12 & slide 18]

Epstein: In December, NuLegacy completed its Earn-in to 70% of the Iceberg deposit. Soon after, Barrack Gold opted NOT to, "claw back" to 70% by spending $15 mm over 5 years. Why should readers think that this was NOT a vote of no confidence by Barrick?

AJM: No, it was not a vote of no confidence, it’s quite the reverse. [See helpful video clip Iceberg deposit]

Barrick has been an excellent partner on many levels. Their sharing of knowledge of the geology & deposits in the Cortez trend greatly helped our development of the Iceberg deposit. Barrick’s key insights and logistical resources helped keep our costs down and increased productivity on the US$5 million of qualifying property expenditures we made.

Barrick’s geological staff in Nevada remains positive on the Iceberg deposit. However, when big companies decide to cut back spending, it’s impractical for them to make exceptions, no matter how attractive a project might be. If you follow what Barrick has done this past year, and what Goldcorp & OceanaGold have done, they have returned to the notion that junior exploration companies are better suited and more motivated than the Majors.

Barrick’s philosophy is to have a majority position and operatorship, and a minority partner helping to carry the load. That way, Barrick gets talented, highly motivated geologists and technical experts to prudently explore for the next elephant deposit. Witness the Arturo deal with Premier Gold, Rye Patch Gold (the Patty property), Quantum Pacific & NuLegacy Gold.

Epstein: Is it useful to compare NuLegacy to Gold Standard Ventures (GSV)? Both are Nevada exploration companies, both are sitting on large land packages. What are the main takeaways?

AJM: Yes, it’s a very useful comparison. Our, ‘cousins to the north’ are almost exactly north of NuLegacy in the parallel Carlin trend. In the face of this 5-year bear market, GSV’s CEO Jonathan Awde and team have done a marvelous job with their Railroad-Pinion project, overcoming innumerable difficulties, raising large quantities of cash and drilling many successful holes.

GSV has a head start on NuLegacy, though we believe we’re closing the gap. Both companies opportunistically acquired or optioned the largest independently owned (as distinct from the Majors who own most of the rest), contiguous land packages in their respective Nevada gold trends. GSV has 40+ sq. miles located on the lower end of the Carlin trend, with neighboring deposits in the 2 to 5 million ounce range. We recently completed the earn-in to 70% of 38+ sq. miles, located on the lower end of the Cortez trend, with neighbors having between 15 to 21 million ounce deposits.

Since 1835, ~180 million ounces of gold have come out of the Carlin trend. The Cortez trend has produced ~40 million ounces since 1956, most of it since 1989 when our Chief Geologist, (COO) Dr. Roger Steininger discovered the Pipeline deposits (~21 million ounces and counting).

GSV’s exploration team boasts significant discoveries in the Carlin trend, while 3 of NuLegacy’s geological team are credited with the discovery of 3 of Barrick’s best performing mines. Dr. Steininger is credited with the discovery of the Pipeline deposit (thus establishing the Cortez trend), which started as a 1 million ounce resource and has grown to a 900,000 oz/year producer in 2015, with All-in Sustaining Costs (AISC) of US$ 603/oz. It has produced over 21 million ounces and is still running at ~500,000+ oz/year at AISC of about US$700/oz.

GSV has spent ~C$17 million to acquire, and ~C$45 million to explore, the Railroad-Pinion property. Since focusing on near-surface oxide material, GSV has established a NI 43-101 compliant resource in the Pinion deposit of 423,000 Indicated ounces (20.84 million Mt grading 0.63 g/t) and 1.02 million Inferred ounces (55.93 million Mt grading 0.57 g/t), and a satellite deposit (the Dark Star) hosting an additional 0.375 million Inferred ounces (23.11 million Mt grading 0.51 g/t).

NuLegacy has spent ~C$7.0 million focusing on nearer-surface oxides, establishing an exploration target of 90-110 million Mt grading 0.9 to 1.1 g/t, within a 3,000 meter structure. [Note: These figures are conceptual in nature and derived from a compilation of 149 historic and 34 NuLegacy drill holes in and around the Iceberg deposit. To date, there has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the target being delineated as a mineral resource.]

To date, there are 2 areas in the North zone (covering circa 350 meters of strike) and a larger area in the Central zone (covering circa 650 meters of strike) where drill density is sufficient to support the planned NI 43-101 resource calculation.

Epstein: Presumably, NuLegacy is entertaining proposals on its 70% stake in the Iceberg deposit. Without being specific, what are the types of scenarios being contemplated?

AJM: Yes, we are entertaining a number of proposals. The primary scenario being discussed is having a Major take an equity stake in NuLegacy…at a premium to market.

Numerous intermediate to large miners have expressed interest in investing with us to advance our project. These discussions are covered by confidentiality agreements, all we can say is that we expect to finance the remainder of our exploration programs by issuing stock to a strategic partner at a premium to market.

Epstein: The perception by some is that it’s been a long-time waiting game, waiting for Barrick, now waiting for something else to happen. How much cash liquidity does the Company have to carefully weigh options?

AJM: It took 5 years to earn-in 70%, and 90 days for Barrick’s decision (more about that later). Capital was hard to raise, so we’ve spent it very carefully. We have C$1.25 million in the treasury, enough to last up to 18 months.

We expect to be able to announce several milestones over the next several months; a possible investment from a Major, starting drilling to expand the Iceberg deposit, hoping to identify new deposits, and the calculation of a maiden resource. It should take 12-18 months to demonstrate the value of NuLegacy’s nascent Carlin-type deposit, and capitalize on that value through a merger or sale to a producing miner.

With increasing geopolitical risks, Majors want a position in Nevada. Notice how quickly the new CEO at Goldcorp positioned them in the Carlin trend via their investment in our cousins to the north Gold Standard Ventures.

Epstein: NuLegacy’s best assays in the North Zone demonstrate high-grade. How do those holes stack up to Barrick’s nearby mines and Goldrush development project?

AJM: They stack up quite favorably… and that’s a good use of the word. If you compare the stacking of the gold-bearing horizons at Barrick’s Goldrush deposit (immediately adjacent to 3 of Barrick’s mines on strike with the Iceberg deposit), you will note that the Iceberg deposit’s gold-bearing horizons are much nearer-surface than those of the Goldrush deposit. That deposit currently has a published resource of ~15 million ounces grading over 4.0 g/t.

Also noteworthy is that the Iceberg deposit’s higher grade gold is oxidized material (rainwater going to that shallow depth has ‘rusted it’), as opposed to Goldrush’s sulfide material. If you visit this link, you’ll find an article I wrote with the assistance of a senior geologist at a Major, which affirms that, ‘it’s significantly cheaper to extract gold from near-surface oxidized material versus deeper sulphide/refractory material.’

Combined with other intercepts in the North & Central zones, this high-grade gold mineralization confirms that the Iceberg deposit is similar to Carlin-type deposits in the Cortez trend composed of large envelopes of decent grades (0.2 to greater than 1.0 g/t), within which are significant areas of much higher grades.

Epstein: Highlights of Central Zone assays indicate lower grades than that of the North Zone. How does the Central Zone fit into the overall picture?

AJM: The Central Zone, with modestly lower grades than the North Zone, has an established strike length of over 650 meters (2,130 feet). Numerous holes have intercepted the 3 known gold-bearing horizons on the property. The main target horizon is at a relatively shallow 300-500 feet and will add considerably to our maiden NI 43-101 resource calculation later this year.

There have also been a handful of slightly deeper holes drilled in the Central Zone, most of which encountered gold-bearing sulfides. This indicates larger and higher grade zones may exist at depth, similar to other deposits in the Cortez trend.

Epstein: Why should readers invest in NuLegacy now, as opposed to later when there’s more clarity on the future of the Iceberg deposit?

AJM: In our view, the risk-reward ratio for an investment in NuLegacy Gold, (TSX-V: NUG) (OTC: NULGF) has never been better. Not only is our exploration property in the Cortez trend valuable to a range of potential suitors, we believe assets in Nevada will command premium valuations.

This does not constitute investment advice but we feel our stock is undervalued. Once the market recognizes the value we’ve already created, our stock price should appreciate to reflect that NuLegacy has,

++ Discovered the best undeveloped prospect in Nevada, with excellent high-grade results and characteristics often associated with low operating costs,

++ Secured the ownership of a 70% working interest in the Iceberg deposit,

++ Identified parties interested in possibly investing. We believe our market cap of C$17.6 million / US$12.7 million is too low.

Epstein: We’ve covered a lot of ground, are there misconceptions about NuLegacy that you would like to address?

AJM: I agree! Thank you for the questions. In ending, perhaps it would be prudent to remind readers that the Iceberg deposit has a number of distinct Carlin-type system targets.

In addition to the partially explored North, Central & South Zones of the Iceberg deposit, there are the West Iceberg, Avocado, Jasperoid basin and Vio targets that have only been minimally explored. The property has gold in 4 distinct horizons – all of which display excellent continuity.

NuLegacy’s COO Roger Steininger, discoverer of Barrick Gold’s multi-million ounce on strike Pipeline gold deposit says, ‘just as the discovery and initial expansion of the Pipeline gold deposit in 1989 gained momentum over time, the expansion of the Iceberg deposit is gathering momentum with each round of drilling, as our understanding of the deposit grows geometrically.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

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