Latest / Kitco MINING / Newcore Gold Sees a Major Valuation Gap After Enchi PFS | Luke Alexander

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Newcore Gold Sees a Major Valuation Gap After Enchi PFS | Luke Alexander · Kitco MINING

• 0:00
  SPEAKER_00: Kitco Mining on-site coverage of the Precious Metal Summit is presented by Newcore Gold.
• 0:10
  SPEAKER_02: Gold Development in Ghana.
• 0:12
  SPEAKER_02: Hello and welcome to Kitco Mining with me, Paul Harris, here at the 2026 Precious Metal Summit in Beaver Creek, Colorado.
• 0:18
  SPEAKER_02: Joining me today is our sponsor, Luke Alexander, president and CEO of Newcore Gold.
• 0:24
  SPEAKER_02: Luke, welcome back to Kitco.
• 0:26
  SPEAKER_01: Yeah, great to see you again, Paul.
• 0:27
  SPEAKER_02: It's been a very busy few months for Newcore Gold.
• 0:30
  SPEAKER_02: In June, you put out a pre-feasibility study on your NCI Gold project in Ghana that delivered a 647 million US dollars after tax net present value at a 5% discount rate, 45% IRR, and that was at a$4,200 per ounce spot gold price.
• 0:48
  SPEAKER_02: Initial capex there, about$351 million.
• 0:51
  SPEAKER_02: You've got an 80,000 meter drilling program underway.
• 0:53
  SPEAKER_02: We've got a lot to talk about.
• 0:55
  SPEAKER_02: But let's start with that uh June PFS.
• 0:58
  SPEAKER_02: Um, what were you most happy about with that PFS?
• 1:01
  SPEAKER_01: Yeah, so the PFS, we outlined a very simple open pit uh CIL operation.
• 1:07
  SPEAKER_01: If you look at the size of the plant that we're looking at, five and a half million tons per random, that's your standard plant size for West Africa.
• 1:15
  SPEAKER_01: Important to highlight that we worked with Leica Podium on this study as our lead engineering firm.
• 1:20
  SPEAKER_01: They were then supported by DRA, Knight Peasle, and the Fuse SLR team.
• 1:26
  SPEAKER_01: So very credible numbers that we put out, very defendable numbers without within that um PFS, and I would ultimately say they're probably conservative.
• 1:36
  SPEAKER_01: We've identified a number of areas for optimization that we can do uh as we move from PFS to FS.
• 1:44
  SPEAKER_01: In terms of the study itself, you highlighted$650 million after tax NPV using a$4,200 gold price.
• 1:53
  SPEAKER_01: When we look at that NPV, I think it's important to look at it relative to our market cap today.
• 1:59
  SPEAKER_01: Our market cap today, we trade around$80 million US.
• 2:04
  SPEAKER_01: So we trade at about, call it, you know, 0.12, 0.15 times the NPV of the project today.
• 2:12
  SPEAKER_01: We think there's a fundamental disconnect between where our market cap is today relative to the project value that we outlined within that PFS.
• 2:22
  SPEAKER_01: And that's one of the things that we're talking about with investors over the next couple of days here at the Precious Metals conference.
• 2:30
  SPEAKER_01: And we're starting to see a number of those investors recognize that there is a disconnect between the value of the project and where we're trading in the market today.
• 2:40
  SPEAKER_01: It outlined a very good payback of 1.4 years and uh and a nice production profile of just over 100,000 ounces over a nine-year mine life.
• 2:51
  SPEAKER_02: Well, thank you, Luke.
• 2:52
  SPEAKER_02: I'm glad you mentioned that sort of disconnect in valuation because I do have a question about that for you.
• 2:57
  SPEAKER_02: Um as you mentioned, that's a quite a steep discount.
• 3:00
  SPEAKER_02: You're sort of uh 0.1, 0.2.
• 3:03
  SPEAKER_02: Um what do you attribute to that that to?
• 3:06
  SPEAKER_02: Why do you think you're trading so low compared to the intrinsic value, potential value of your project?
• 3:13
  SPEAKER_01: Yeah, so going from PEA to PFS, we did transition from a heap leach project to a CIL project.
• 3:21
  SPEAKER_01: Big motivations uh for that is CIL projects are the standard project that you see built around the world and specifically in Ghana and in West Africa.
• 3:31
  SPEAKER_01: When we did transition to a CIL, we had a lot of very positive feedback from our peers, and a number of them were very keen to see the results that came out of this PFS study.
• 3:41
  SPEAKER_01: But we did also have a group of shareholders who were still focused on a heap leach operation and some of the economics that were outlined within the uh PEA.
• 3:52
  SPEAKER_01: Through the test work that we did, and obviously the fact that CIL is a better way to process the material, especially as we grow the overall size of the fresh resource across our project.
• 4:05
  SPEAKER_01: It makes more sense to have a CIL operation.
• 4:08
  SPEAKER_01: But that group of shareholders who were focused on heap bleach, I think were disappointed by some of the numbers, especially the increase in CapEx.
• 4:16
  SPEAKER_01: And as a result, you know, we did see this stock trade-off on uh on the day.
• 4:21
  SPEAKER_01: Interestingly, though, we have seen a lot of interest come in from a number of very technically focused groups as well as strategic groups who recognize all the de-risking work that did happen and that has gone into that PFS and are very focused on the economics of this project.
• 4:39
  SPEAKER_01: So, again, that's something that we're communicating over the next few days with the investors that we're meeting with.
• 4:45
  SPEAKER_01: And this really is the first conference that we've been to since the PFS was released.
• 4:50
  SPEAKER_02: With the interest you've been getting from um Peers and other bigger entities in the space, to what extent or not would a strategic investment be desirable for you?
• 5:01
  SPEAKER_02: I mean, having cash is always a good thing, but in terms of having that uh signal support for what you're doing and the work you've done, having a bigger company come and say, you know, we like what they're doing, we're gonna support that.
• 5:13
  SPEAKER_02: Here's uh here's a um a token of our estimation.
• 5:16
  SPEAKER_02: We want a sort of 10% or 15% of you.
• 5:19
  SPEAKER_01: Yeah, so I think that's one way of you know, well, I guess that's one way that investors see uh a de-risking of a project is to have a larger company come in, do full due diligence, and want to take a toehold position, which you're ultimately suggesting.
• 5:34
  SPEAKER_01: Uh, I would say for us at New Core, we're 55% institutionally owned.
• 5:39
  SPEAKER_01: These are deep pocketed, long-term mining-focused investors who recognize the value of our project, who've done a huge amount of work on the PFS, on the exploration upside, and want to be uh involved in the company because of that upside that they see.
• 5:55
  SPEAKER_01: Management, management and board, we have a track record of creating a lot of value for shareholders through other companies that we've been involved in.
• 6:02
  SPEAKER_01: So that's another thing that I would point to.
• 6:04
  SPEAKER_01: But absolutely, you know, what you're talking about in terms of a strategic investment, um, that's something that could be another way to highlight the project that we've got and that disconnect between where we're trading in the market today and the true project value.
• 6:20
  SPEAKER_01: The other way of ultimately closing that is you know, through the market, through communicating um, you know, the economics of the project, through results such as we had last week with the exploration, or someone comes along and makes a bid for the entire company because that disconnect is too large.
• 6:38
  SPEAKER_01: And that's in a uh a potential outcome as well.
• 6:41
  SPEAKER_02: Yeah, we've seen a deal like that announced this week with Artemis buying um, I forget the name of now, but um they bought a company that's uh the bid for company that's very, very undervalued.
• 6:51
  SPEAKER_02: Um, but that's a bit of an aside.
• 6:53
  SPEAKER_02: You mentioned that uh 55% of your shareholders are institutions.
• 6:56
  SPEAKER_02: So was it the retail investors that perhaps don't understand the the benefit of CIL that were with those that were selling out because it wasn't a heap bleach?
• 7:06
  SPEAKER_01: Yeah, the feedback from our cornerstone key investors, and we obviously you know met with them and over the last um uh number of months leading up to the PFS being completed.
• 7:20
  SPEAKER_01: We obviously spoke to them about the CIL.
• 7:23
  SPEAKER_01: They recognized the additional cost required for a CIL, they recognize that that is the standard way of processing um material.
• 7:31
  SPEAKER_01: So they were all very comfortable and encouraged us to ultimately go that uh that route.
• 7:37
  SPEAKER_01: And it is the best route for the project.
• 7:39
  SPEAKER_01: And again, let's not lose focus on the economics that were within that PFS after tax NPV of$647 million out of$4,200 gold price.
• 7:53
  SPEAKER_01: That compares to a$80 million market cap today.
• 7:56
  SPEAKER_01: So I would say there's a fundamental underpinning of value, there's a re-rate opportunity just on the multiple increasing as people start to recognize the value of the CIL project that we outlined.
• 8:10
  SPEAKER_01: But then layered on that, on top of that, we have true district scale exploration upside.
• 8:15
  SPEAKER_01: When we commissioned our PFS in January and highlighted that we were going the CIL route, gold was trading around$5,000.
• 8:24
  SPEAKER_01: One of the things our our project also provides is tremendous leverage to the gold price.
• 8:29
  SPEAKER_01: At a$5,000 gold price, you're looking at an after-tax NPV of$968 million.
• 8:37
  SPEAKER_01: You know, that's a very good leverage to the gold price for uh for investors, and it's almost double what our base case is for the project.
• 8:47
  SPEAKER_01: So those are the you know, those are the things that we've been talking about and pointing to with investors that we've been um meeting with, and we're you know getting feedback that a number of them see that disconnect that there is in the market today.
• 9:01
  SPEAKER_02: Okay, how does um Ghana and its fiscal royalty regime play into this or what impact is there?
• 9:08
  SPEAKER_02: Because uh there's been you know Ghana's been one of the more stable and attractive jurisdictions of West Africa for gold development and operating gold mines for for many, many years.
• 9:16
  SPEAKER_02: But more recently, they have uh there's been moves by the government to they they want the miners to sell gold to the state or state agency at a bit of a discount, they want to develop their own refining capacity in country.
• 9:30
  SPEAKER_02: Um, is there perhaps a little bit of wobbling investor confidence because of that?
• 9:34
  SPEAKER_02: And to what extent do you think what what would the impact of these changes be on on new car new core and NCI as and when that comes into production?
• 9:42
  SPEAKER_01: Yeah, so I'd say in 2026 we've been asked more about Ghana than we have the last six years since since I joined as CEO of the company.
• 9:53
  SPEAKER_01: So without a doubt, there's been a lot of headline news that has not been beneficial for the mining country for the mining companies in country.
• 10:03
  SPEAKER_01: The royalties um has been one, they've moved to a sliding scale royalty.
• 10:08
  SPEAKER_01: Uh the the need to use contract miners would be another one that I would add to what you were commenting on.
• 10:14
  SPEAKER_01: But one of the things we've also been talking about with investors is the advantage we have in Ghana today is all of that is in the rear view mirror.
• 10:24
  SPEAKER_01: All of that's happened, all of that is incorporated into our PFS, the sliding scale royalties incorporated into it.
• 10:32
  SPEAKER_01: You know, the current tax regime is uh incorporated into it.
• 10:36
  SPEAKER_01: We always contemplated using contract mining in country because it is Africa's largest gold producer.
• 10:43
  SPEAKER_01: There's a huge amount of contract mining companies in country that are world class, so that has real benefits to us.
• 10:51
  SPEAKER_01: So all of those things are now in the rear view mirror and they're all incorporated into our PFS, but we still are getting asked the question on a regular basis.
• 11:01
  SPEAKER_01: Where I would be more nervous is countries that have not yet changed their mining code.
• 11:09
  SPEAKER_01: It's been 20 years since there was a major change to the Ghanaian mining code, so we don't anticipate any further changes in the future.
• 11:17
  SPEAKER_01: But for countries that have not changed their mining code yet, that's where I think there's bigger risk.
• 11:23
  SPEAKER_01: But because of the headlines we've seen over the last number of months, we are getting asked those questions.
• 11:30
  SPEAKER_01: But I would argue that is an opportunity for investors today, is you can buy, you know, new core and already have all of that incorporated, as opposed to the risk of other jurisdictions that might be looking at following some of what new core or sort of what Ghana and other jurisdictions have done in terms of changing their mining codes.
• 11:51
  SPEAKER_02: Okay, I want to go back to the PFS for a moment.
• 11:54
  SPEAKER_02: Uh the economics in there were at 4,200 US dollars per ounce gold price, reference gold price.
• 11:59
  SPEAKER_02: That's quite aggressive.
• 12:01
  SPEAKER_02: The norm at the moment seems to be, let's say, 3,600 give or take.
• 12:05
  SPEAKER_02: What were your thought processes fixing on that particular sort of price point?
• 12:10
  SPEAKER_01: Yeah, so we used a base case in our uh in our study of$3,800 um gold.
• 12:18
  SPEAKER_01: So we think that's a good downside um case and a good floor for for the gold price.
• 12:25
  SPEAKER_01: At a$3,800 gold price, we're looking at almost a half billion dollar after tax NPV,$496 million, uh 37% IRR.
• 12:36
  SPEAKER_01: So still very robust economics using that downside case.
• 12:41
  SPEAKER_01: I guess um our view at the time, you know, gold was bouncing around$43,000,$4,500, and we thought that that was a good price to use.
• 12:51
  SPEAKER_01: The$40,$4,200 is one that we obviously quote in our presentation because you know that's more where gold is trading today.
• 13:00
  SPEAKER_01: And then we also obviously provide the upside case.
• 13:03
  SPEAKER_01: I mean, if you're investing in a uh exploration development company like Nucore, you presumably have a favorable view on the gold price.
• 13:12
  SPEAKER_01: And one of the things that our project does create is tremendous leverage to the upside from a gold price perspective.
• 13:20
  SPEAKER_01: As we highlighted at$3,800, you're looking at an after-tax NPV of$496 million.
• 13:28
  SPEAKER_01: At a$5,000 gold price, you're looking at$968 million of after tax NPV.
• 13:35
  SPEAKER_01: You're almost doubling the NPV of the project.
• 13:38
  SPEAKER_01: So tremendous leverage to the upside from a gold price perspective.
• 13:41
  SPEAKER_01: And I'd encourage anybody who's listening to this interview, go to our website, have a look at our presentation.
• 13:47
  SPEAKER_01: It's all outlined in there, and you can pick whatever gold price you want and come up with your own assumptions.
• 13:53
  SPEAKER_02: Fair enough.
• 13:54
  SPEAKER_02: Let's uh look to the future.
• 13:55
  SPEAKER_02: You've completed the PFS, you're now working on a feasibility study.
• 13:59
  SPEAKER_02: What are some of the key remaining technical work streams that you need to complete to be able to deliver the feasibility study?
• 14:05
  SPEAKER_02: And what sort of timeline are you looking at to deliver that study?
• 14:08
  SPEAKER_01: So the thing I would highlight is the PFS was ultimately a data point in time.
• 14:14
  SPEAKER_01: So what we outlined within the PFS from a production perspective, from a resource perspective, was a data point in time.
• 14:22
  SPEAKER_01: The cutoff date that we used for our resource for the PFS was October of last year.
• 14:29
  SPEAKER_01: Of our ongoing 80,000 meter drill program, it only included 28,000 meters.
• 14:37
  SPEAKER_01: That leaves us with an additional 52,000 meters that will go into future studies, future MRE updates.
• 14:45
  SPEAKER_01: Of that 52,000 meters, we've now released another 19,000 meters of results.
• 14:52
  SPEAKER_01: So 47 of our 80,000 meters released so far.
• 14:58
  SPEAKER_01: We've had very good results, including last week, one of our best um grade meter uh intercepts ever on the project.
• 15:07
  SPEAKER_01: Very shallow, about 60 meters below surface.
• 15:11
  SPEAKER_01: Those types of results are what we highlight in terms of data point in time and the impact on future studies.
• 15:19
  SPEAKER_01: We now have another 33,000 meters of drilling that's ongoing that we'll release over the next number of months, and we see that as a major catalyst for the company as well.
• 15:30
  SPEAKER_01: Once we've completed all of that drilling, that additional 52,000 meters will then go into a uh resource update, which will then get incorporated into a feasibility study.
• 15:44
  SPEAKER_01: Our expectation is we will grow the overall size of the resource, but we'll also convert a lot of additional ounces into the indicated category, which then with future studies will move into the reserve category, which will then increase the overall production profile and will improve the overall economics and NPV of the project.
• 16:04
  SPEAKER_01: One of the key elements though is with the PFS, we've produced reserves for the first ever for the first time ever on the project.
• 16:15
  SPEAKER_01: With those reserves, we are now able to apply for a mining lease.
• 16:20
  SPEAKER_01: That we see as a major de-risking event for for uh for the company.
• 16:26
  SPEAKER_01: We've got a lot of support from the government to apply for a mining lease to fast track this into production because they see our NCI project as one of the two most advanced projects in the entire country from a large-scale mining perspective.
• 16:40
  SPEAKER_01: Obviously, that will create a lot of economic benefit for Ghana.
• 16:44
  SPEAKER_01: It will create a lot of jobs.
• 16:46
  SPEAKER_01: There is not a mine in the West in the um uh western north region of the country, so they're very motivated to see us fast track this project into production.
• 16:56
  SPEAKER_01: So a huge amount of de-risking work is happening in the background to move it along that path.
• 17:02
  SPEAKER_01: And I know I'm giving you a long-winded answer here.
• 17:06
  SPEAKER_01: Um, you were asking about feasibility, but I think it's important to highlight that a critical element is all of that drilling.
• 17:12
  SPEAKER_01: Apply for a mining lease, but then we're continuing to do environmental baseline work, hydrological work, geotech work, metallurgical work.
• 17:22
  SPEAKER_01: All of those aspects are critical to be able to move us from PFS to FS and to further de-risk that project to be in a position to make a ultimate construction decision and take it into production.
• 17:36
  SPEAKER_02: Okay, I want to sort of follow up on a couple of points there.
• 17:39
  SPEAKER_02: With the exploration you're doing, you mentioned you're gonna be expanding and upgrading resource.
• 17:45
  SPEAKER_02: And in practical terms, when it comes to the feasibility and then building a mine, will that enable you?
• 17:49
  SPEAKER_02: Are you looking to increase the annual production, increase the mine life, a bit of both?
• 17:55
  SPEAKER_01: Yeah, I'd say a bit of both.
• 17:56
  SPEAKER_01: Um, again, I'd encourage anyone listening who wants to get into more detail to go to our website and have a look.
• 18:03
  SPEAKER_01: But if you look at our production profile, nine year, 104,000 ounces of production.
• 18:08
  SPEAKER_01: First three years, we average 130,000 ounces of production.
• 18:13
  SPEAKER_01: That is driven by 0.8 gram per ton material.
• 18:17
  SPEAKER_01: Life of mine is about 0.6, 0.65 gram material.
• 18:22
  SPEAKER_01: Having that higher grade in the first three years, you would know, has a very positive impact from an NPV perspective, IRR overall project economics.
• 18:33
  SPEAKER_01: We've identified a number of areas within our pits and within our block model, areas where we've got call it 0.7 to 0.8 gram material.
• 18:44
  SPEAKER_01: So similar material to what we're seeing in those first three years that we will be able to convert and bring into the mine plan, which will then push some of the lower grade material in years four, five, and six out further into the mine pan.
• 18:58
  SPEAKER_01: And what that will do is have a very positive impact on the project economics, NPV, um, uh, IRR, all of the different metrics that investors and strategics ultimately look at when evaluating a project.
• 19:13
  SPEAKER_01: So that's something that we're focused on is moving additional higher grade material closer to the front end of the mine plan.
• 19:22
  SPEAKER_01: We're then also looking to expand the overall size of the resource.
• 19:27
  SPEAKER_01: And when we have good drill results, we immediately go back to those areas and look to e to take them straight into that indicated category, which then over time will bring them into the um reserve category.
• 19:42
  SPEAKER_01: In the mid to longer term, the other area that we're focused on from an exploration perspective is when you look at these greenstone hosted deposits along the Sefui Bibbiani belt, including Tirano at 5.5 million ounces, Bibbiani at 6.5 million ounces, New Monts a half of mine at 20 million ounces.
• 20:03
  SPEAKER_01: They have these large high grade shoots that exist across those projects.
• 20:09
  SPEAKER_01: With some of the deeper drilling down below, call it 150, 200 meters.
• 20:14
  SPEAKER_01: We've started to identify some of those high grade feeder zones.
• 20:18
  SPEAKER_01: We do want to get back in, do some additional drilling to continue to prove those out to show that we have that multi-million ounce, 5 million ounce plus type um uh resource potential that will take this way beyond a 10-year mine life, even beyond a 20-year mine life.
• 20:37
  SPEAKER_01: So it's balancing that immediate production, but also showing that that big upside potential that exists.
• 20:44
  SPEAKER_01: Yeah, Sharon, you got some legs.
• 20:46
  SPEAKER_01: Exactly.
• 20:47
  SPEAKER_02: You got a lot going on, uh Luke.
• 20:49
  SPEAKER_02: So, what are some of the key catalysts that our viewers can expect to see from New Core over the next 12 to 18 months?
• 20:54
  SPEAKER_01: So, drilling would be one of the major catalysts.
• 20:56
  SPEAKER_01: I mean, um we put results out uh um uh last week that ultimately were very well received by the market.
• 21:07
  SPEAKER_01: Uh, we had one of our best ever uh uh grade meter intercepts on the project.
• 21:12
  SPEAKER_01: We intercepted uh 2.6 um grams over uh almost 70 meters, 69 meters.
• 21:20
  SPEAKER_01: Uh within that, we had 6.4 grams over 24 meters, and that was intercepted only about 60 meters below surface.
• 21:28
  SPEAKER_01: That increased our stock price by about 30% on the day.
• 21:32
  SPEAKER_01: So this is one of the things that we talk about is we're trading at a at a market cap today that exploration and successful drill results will still be a major catalyst for the company.
• 21:44
  SPEAKER_01: We put those results out, bang, stock up 30%.
• 21:48
  SPEAKER_01: So we see that as a as a real positive that you know the market is encouraged by the exploration that we're and results that we're putting out on this project.
• 21:57
  SPEAKER_01: So as we discussed, we have another 33,000 meters of drill results to come.
• 22:02
  SPEAKER_01: Those will come out, you know, over the next call at uh six, six to nine months.
• 22:07
  SPEAKER_01: Um, if you look at our our kind of press releases, it's typically been ever every four to six weeks we get drill results out.
• 22:14
  SPEAKER_01: So we're excited to continue to get those results out to the market.
• 22:18
  SPEAKER_01: We will be applying for a mining lease.
• 22:20
  SPEAKER_01: We see that as a as another major catalyst for the company.
• 22:24
  SPEAKER_01: And then in the background, we're doing all that that um boring work that might not be as kind of uh uh market newsworthy, let's say, uh, but it's critical to continue to de-risk that project towards a feasibility study and all uh eventual production.
• 22:42
  SPEAKER_01: So it's the stuff that I talked about hydrological work, geotech work, uh environmental work, additional metallurgical work.
• 22:49
  SPEAKER_01: So all of that stuff is happening in the background to continue to de-risk this project towards a production decision.
• 22:56
  SPEAKER_02: It sounds like the news will be coming thick and fast.
• 22:58
  SPEAKER_02: Newcore gold trades on the TSXV under the ticket NCAU.
• 23:03
  SPEAKER_02: Luke Alexander, thank you very much for joining me again today.
• 23:05
  SPEAKER_02: Yeah, thanks a lot for having me, Paul.
• 23:07
  SPEAKER_02: And thank you, of course, for your sponsorship.
• 23:09
  SPEAKER_02: And we have a lot more to come for the 2026 Precious Metal Summit here in Beaver Creek, Colorado.
• 23:14
  SPEAKER_02: So stay tuned and hit that subscribe button.
• 23:16
  SPEAKER_00: I'm Paul Harris, and this is Kitco Mining.
• 23:19
  SPEAKER_00: Kitco Mining on site coverage of the Precious Metal Summit is presented by New Core Gold.