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Outcome Visualization Project as of Oct 22, 2021: Nevada Expl Inc: South Grass Valley
Project:South Grass ValleyLocation:United StatesStage:2-Target Drilling
Net Interest:100% WIUncapped NSR:0.0%Target Metals:Gold
OV Project ID:1000030OVP Posted:5/26/2021OVP Retired:
Current OV ID:1000082Current OV Confirmed:5/26/2021Visualizer:JK
Nevada Exploration Inc (NGE-V)
ProfileSearchWeb SiteTreeForumSEDARQuoteIPV
Issued
168,621,620
Price
$0.085
Working Capital
$4,266,203
Key People: Wade A. Hodges (CEO), Dennis L. Higgs (Chair), James Buskard (Pres), Christina Blacker (CFO)
Diluted
267,054,451
Insiders
13.8%
As of
7/31/2021
Visualized Outcome: Nevada Expl Inc: South Grass Valley 3,500 tpd UG Scenario
The South Grass Valley project is located in northern Nevada in an area outside so called trends such as Carlin, Battle Mountain and Getchell with no known Carlin type gold systems within a 20 km radius. The play was generated through a regional gold in groundwater sampling program that traversed the 40 km length of the up to 10 km wide Grass Valley. Gold in groundwater anomalies were established at the northern end not far from the Cortez and Goldrush systems, and at the southern end which has been intruded by the Jurassic aged Grass Valley stock south of which outcropping, unaltered Lower Plate rocks have been tested without success. Drilling since 2018 through the gravel cover north of the intrusion has demonstrated a large, highly altered Lower Plate window whose hydrothermal system exhibits Carlin pathfinder elements such as arsenic, antimony, thallium and mercury. A grid core drilling program in 2018-2019 failed to vector in on a gold enriched target, but an RC program in 2020 established that the fluid flow was from the east where geophysics indicated a NNW oriented structure NGE calls the Water Canyon Corridor which tracks the eastern flank of Grass Valley. West of the structure the stratigraphy dips eastwards 15 degrees, draping over the Grass Valley stock. East of the structure the stratigraphy dip reverses, dipping 70 degrees westward. NGE has identified the Cambrian aged CLM formation beneath the Ordovician aged Goodwin Limestone as the likeliest unit for hosting a major high grade Carlin type orebody. The CLM unit within the 5 km long East Golden Gorge target is the focus of a 2021 core drill program testing for the 1,000-1,400 m deep CLM unit (gravel cover is 559 m deep in this area). The first hole started Mar 3 near the northern end of the target was completed during the third week of May to a depth of about 1,400 m. A second hole farther south where the East Golden Gorge target abuts the Grass Valley stock was started in late May. The challenge faced by SGV is that no ore grade gold mineralization has so far been intersected, there is no nearby Carlin type gold mineralization, and this intense Carlin type system is outside the main trends. But NGE management is now convinced that the Water Canyon Corridor is a crustal scale structure that is the pathway for a Carlin type hydrothermal system that pumped through a very large volume of Lower Plate rocks at SGV. In the context of John Muntean's Farallon slab rollback theory as the source of Carlin type fluids, there is no reason that the SGV system should not be pregnant with gold. In this completely blind setting it is a question of where the right structural and chemical conditions were present to drop out the gold. Once NGE demonstrates ore grade mineralization, market skepticism will evaporate. The structural setting is very similar to that of North Carlin where the NNW oriented Post Fault is the primary conduit feeding Carlin type fluids into structural traps to the west. While the overall Goldstrike system hosts over 50 million ounces, for SGV a more modest 10.3 million ounce outcome encompassing the underground mined Deep Post-Meikle-Rodeo zones as 16 million tonnes of 20 g/t gold has been visualized and exploited as a 3,500 tpd underground mine.
Visualized Outcome Summary: Nevada Expl Inc: South Grass Valley 3,500 tpd UG Scenario
Deposit Scenario: 16,000,000 t @ 20.00 g/t Gold
Mining Scenario: Underground 3,500 tpd 12.5 yrs, CapEx $1.0 billion, SustCapEx $300.0 million, OpEx $176.00/t (USD)
LOM Payable: 9.3 million oz gold
Economic Outcome (USD): Revenue Model at OV designated Metal Prices

Annual AverageLife of Mine (LOM)LOM Stats
Recoverable Revenue:$1,339,792,329$16,780,177,902$1,049/t ore Recoverable Value:
   Smelter/Transport Costs:($13,397,923)($167,801,779)1.0% of Recoverable Revenue
Gross Payable Revenue:$1,326,394,406$16,612,376,12399.0% of Recoverable Revenue
   Royalties:$0$00.0% of Gross Payable Revenue
Net Payable Revenue:$1,326,394,406$16,612,376,12399.0% of Recoverable Revenue
   Mining Cost:($153,300,000)($1,920,000,000)62% of OpEx - $120.00/t ore
   Processing Cost:($63,875,000)($800,000,000)26% of OpEx - $50.00/t ore
   Other Cost:($7,665,000)($96,000,000)3% of OpEx - $6.00/t ore
   Sustaining Cost:($23,076,923)($300,000,000)10% of OpEx - $18.75/t ore
Total Operating Cost:($247,916,923)($3,116,000,000)19% of Net Payable Revenue - OpEx - $194.75/t ore
Pre-Tax Cash Flow:$1,078,477,483$13,496,376,12381% of Net Payable Revenue - $843.52/t ore
   Taxes:($248,288,465)($3,117,845,843)23% of Pre-Tax Cash Flow - $194.87/t ore
After-Tax Cash Flow:$830,189,018$10,378,530,28062% of Net Payable Revenue - $648.66/t ore
Note: Concentrate transport costs, smelter treatment costs and retention are subtracted from recoverable revenue to get gross payable revenue to which the uncapped royalty rate for the project is applied. The annual average of LOM sustaining cost is expensed as an annual operating cost. Annual average figures reflect full production years.
Economic Outcome (USD): Royalty Model for 1% NSR at OV designated Metal Prices
Mine Life:13 yearsStartupNPV 5%NPV 10%NPV 15%
Annual Avg NSR:$13,263,944Now$115,476,970$83,992,234$63,503,828
LOM NSR:$166,123,7612028$82,067,327$43,101,297$23,873,441
Economic Outcome - Discount Rate: 9.0% - CAD AT NPV: $5.8 billion - Good Speculative Value
Gross Rock Value (USD/t):$1,152Recoverable Rock Value:$1,049Payable Rock Value:$1,038
LOM Net Payable Revenue (USD):$16,612,376,123LOM PT Cash Flow (USD):$13,496,376,123LOM AT Cash Flow (USD):$10,378,530,280
USD Pre-Tax NPV:$6,333,573,175Pre-Tax IRR:107.8%Pre-Tax Payback:0.9
USD After-Tax NPV:$4,678,944,471After-Tax IRR:84.3%After-Tax Payback:1.2
CAD Fair Spec Value Low:$57,817,717CAD Fair Spec Value High:$144,544,292CAD Implied Project Value:$22,699,628
Price Target if Visualized Outcome delivered by Expl-Dev Cycle without dilution: CAD $21.65
Fair Speculative Value Stock Price Range: CAD $0.22 - $0.54
MSV (Market Cycle S Curve): Market Speculative Value represents the typical market pricing pattern of a new discovery as it moves through its exploration-development cycle. The irrational pricing behavior of the yellow channel contrasts with the fair speculative value of the blue channel as defined by the rational speculation model because during the pre-economic study stages there is great uncertainty about how big the discovery will turn out.
Fair Speculative Value Ladder
USD OV NPVCAD OV NPVExch RateDilutedNet Interest
$4,678,944,471$5,781,771,6831.2357267,054,451100.00%
Project StageUncertainty RangeCAD FSV RangeCAD FSV per Share RangeCAD MSV per Share Range
Grassroots 0.5% - 1.0% $28,908,858 - $57,817,717 $0.11 - $0.22 $0.22 - $0.54
Target Drilling 1.0% - 2.5% $57,817,717 - $144,544,292 $0.22 - $0.54 $0.54 - $1.08
Discovery Delineation 2.5% - 5.0% $144,544,292 - $289,088,584 $0.54 - $1.08 $1.08 - $16.24
Infill & Metallurgy 5% - 10% $289,088,584 - $578,177,168 $1.08 - $2.17 $10.83 - $21.65
PEA 10% - 25% $578,177,168 - $1,445,442,921 $2.17 - $5.41 $5.41 - $16.24
Prefeasibility 25% - 50% $1,445,442,921 - $2,890,885,841 $5.41 - $10.83 $5.41 - $10.83
Permitting & Feasibility 50% - 75% $2,890,885,841 - $4,336,328,762 $10.83 - $16.24 $5.41 - $10.83
Construction 75% - 100% $4,336,328,762 - $5,781,771,683 $16.24 - $21.65 $10.83 - $16.24
Production 100% $5,781,771,683 $21.65 $21.65 - $27.06
Market Speculative Value Stock Price Range: CAD $0.54 - $1.08
Warning: while the market spec value (S-Curve) and fair spec value channels presented in project value terms track the evolving expected ultimate outcome value, when presented in stock price terms the expected stock prices are subject to dilution through future equity financings or project interest farmouts.
Alternative Metal Price Scenarios

Metal 1Metal 2Metal 3Metal 4

Gold


Spot:$1,792 /oz


OV Assigned:$1,792 /oz


Pessimistic:$1,300 /oz


Optimistic:$2,300 /oz


Fantasy:$3,000 /oz


Note: for Metal 1 pessimistic, optimistic and fantasy price scenarios, OV assigned prices are used for Metals 2-4
Economic Outcomes with Alternative Metal Price Scenarios

USD PT NPVUSD PT IRRUSD AT NPVUSD AT IRRAT Payback yrs
Spot:$6,333,573,175107.8%$4,678,944,47184.3%1.2
OV Assigned:$6,333,573,175107.8%$4,678,944,47184.3%1.2
Pessimistic:$3,882,955,61671.3%$2,839,755,99356.6%1.7
Optimistic:$8,860,850,313145.4%$6,575,665,963112.6%0.9
Fantasy:$12,345,376,600197.2%$9,190,802,941151.6%0.7
Fair Speculative Value for Alternative Metal Price Scenarios
Stage: Target Drilling - 1.0% - 2.5%

CAD AT NPVCAD Target PriceCAD FSV RangeCAD FSV per Share RangeCAD MSV per Share Range
Spot:$5,781,771,683$21.65$57,817,717 - $144,544,292$0.22 - $0.54$0.54 - $1.08
OV Assigned:$5,781,771,683$21.65$57,817,717 - $144,544,292$0.22 - $0.54$0.54 - $1.08
Pessimistic:$3,509,086,480$13.14$35,090,865 - $87,727,162$0.13 - $0.33$0.33 - $0.66
Optimistic:$8,125,550,430$30.43$81,255,504 - $203,138,761$0.30 - $0.76$0.76 - $1.52
Fantasy:$11,357,075,195$42.53$113,570,752 - $283,926,880$0.43 - $1.06$1.06 - $2.13
View Detailed Visualized Outcome (KRO Members Only)
Disclaimer: A visualized outcome is one of many possible outcomes for an exploration project as it moves through the 9 stages of the exploration-development cycle from grassroots to a producing mine with failure as an outcome at any point along the way. The range of possible outcomes for the physical nature of a deposit shrinks after delivery of an initial 43-101 resource estimate. While the nature of the deposit constrains the range of mining scenarios, the cost assumptions will vary as the project moves through the feasibility demonstration stages of the cycle, which affects the economic value of the final outcome. This economic value will also vary according to the prices of the metals targeted for extraction which may change during the years it takes for a project to become a mine. An outcome visualization is thus a compilation of best guess assumptions for the key variables that drive the discounted cash flow model, the basis for assigning an economic value to a mine. An OV is not intended as a prediction, but rather as a framework that allows the incorporation of new information generated by the exploration-development cycle for the project into a valuation model on an ongoing, dynamic basis.
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