David Beling, CEO, Bullfrog Gold Corp.
Bullfrog Gold Corp. (OTCQB:BFGC) is a new (2011) U.S.-based gold and silver exploration company with a development project in a region of Arizona and a long history of proven gold production. The region within 25 miles of the project has produced 1.2 million ounces of gold and 1 million ounces of silver.
Bullfrog's Newsboy Project in Maricopa County, Arizona, was significantly developed in the early 1990s, but was abandoned by the previous owner when gold prices languished below $400 per ounce; production was not cost effective. Now with gold above $1,600, the project shows great promise with a shallow mineral inventory of 235,000 ounces of gold and 3.4 million ounces of silver.
Even with just the Newsboy project, Bullfrog would be a promising gold company as an investment opportunity, but the firm also has an exploration project adjacent to a major producing mine. The Bullfrog Project in Nye County, Nevada is in a district that has produced 3.4 million ounces of gold. Next door to the Bullfrog Project, Barrick Gold Corporation's (NYSE:ABX) Montgomery-Shoshone open pit mine has extracted 220,000 ounces of gold, while the underground mine, which closed in 1911, produced about 94,000 ounces of gold. In the 1980s and 1990s, Barrick Gold and its predecessors also extracted about 3 million ounces of gold from two open pit mines in the area.
Besides gold in the ground in two promising projects, Colorado-based Bullfrog is led by experienced executive and technical teams, which have proven track records acquiring, discovering and operating gold mines. Alan Lindsay, Chairman of the Board, has founded mining companies before, and David Beling, President, CEO and Director, has almost 50 years of experience in the precious metal, base metal and energy mineral sectors. Beling has been involved with 84 underground mines, 127 open pits and 163 mineral processing plants. Besides being a professional mining engineer, he has been a director and senior executive with nine junior mining companies. He knows the mining business from top to bottom.
With fewer than 35 million shares issued and outstanding, the upside potential for Bullfrog stock is significant. In February of last year, the stock traded as high as $0.80, but is now sitting around $0.44 (as of this writing). Volume is gradually increasing from a few thousand shares traded in its first year to more than 100,000 changing hands on a given day last month. With two great projects, an experienced leadership team and the price of gold sitting where it is with little to no sign of a significant decline in the near future, Bullfrog is poised to break out.
I think this is one junior mining company with a very promising future to keep in mind. I recently had the opportunity to interview Mr. Beling about Bullfrog, the gold market and the mining sector.
Patrick MontesDeOca: Thank you, David, for the opportunity to speak to you, and I appreciate you taking the time to talk. I would like to go right into the interview, and the first question I would like to ask you is about the Newsboy project. What is happening with Newsboy? Has the drilling, which was announced January 16, begun there? What does it involve?
David Beling: Yes, we started drilling on January 23. We have about five holes completed in our Queen of Sheba exploration target area. It's an area in which we just leased two patented parcels right in the center of it. We are quite excited about the drilling. So far, we've got good drill results as far as observation goes, but it will take us awhile to get the assays in and quantifications of what may be in that exploration target.
In the Newsboy area in the main deposit, we intersected a rather thick higher grade zone earlier last year, and we'll be putting more drill holes into that area. We'll also be drilling during the next few weeks towards the end of this program.
We have two types of things that we are after: expanding known mineralization, and exploring additional areas that we have had some pretty good surface indications on. We also have several other targets that are well within trucking distance of our main deposit. We're in the process of picking up additional claims with well over 100 additional mining claims, which have very strong potential for additional resource development in this project.
So the Newsboy project is up and going and, as you may know, Patrick, there has been a large database generated on this project. There was a feasibility study prepared 20 years ago by an Australian mining group, and we've acquired almost all of the information available about the drill-hole assays, certifications and so forth. Therefore, we have a large database on the geology, exploration, mining, metallurgy, and so forth, so this project is advanced and we believe that we are able to push this into becoming a mining operation.
PM: In December 2012, you leased more land to expand the Newsboy project. Do you have any plans to further expand that project?
DB: Yes, in fact those two patented claims that we leased in December are where we are drilling now as we speak, and we're going to stake at least another 100 claims. In fact, we have already done it. We are just perfecting the locations of those right now. They cover all the areas that we see in the region as far as having good mineral potential. We're going to end up with over 7,000 acres of land in this district, and we want to expand the land position we've got.
PM: Let's talk about the Bullfrog Project for a minute. Could you bring us up to speed on the progress at the Bullfrog Project in Nevada, and have you drilled the high priority targets you had planned to do by late 2012?
DB: Well, just a quick summary. We applied for permits from the Bureau of Land Management, and they requested us to do a more detailed permit application because of a desert tortoise habitat, so that's something we have to prepare and submit before we drill. But in a nutshell, the Bullfrog Project that we own is a strategic land position that's adjacent to where Barrick Gold mined and recovered over two and a half million ounces of gold back in the late '90s. When they shut that down the economics… I mean gold was well under $350 an ounce, and now it is in the $1650s, so there's still very good potential and let's face it, the best place to find more gold is next to a gold mine.
So we have a strategic land position and we have two patented claims and 79 lode mining claims, and the structures that Barrick had mined go off onto our property. The main detachment faults and mineral trends go up into our property, so we are quite enthused about getting drilling authority to drill that.
We have another project in Nevada that we picked up about seven months ago. It's in central Nevada, and it's got the potential for shallow hybrid silver resources, as well as base metal credits. It's called the Klondike project, and we actually staked the entire district. It's in the Alpha mining district, which was discovered in the 1870s. We have 232 claims there, so we virtually have the whole district, but that's a narrowly staged exploration project. It really turns my crank on getting relatively high-grade silver within 30 and 50 feet of the surface.
Between the three projects -- the Newsboy, Bullfrog, and Klondike -- we've got 3 solid assets for a junior company, and we want to get all 3 of our horses running. The Newsboy is off and running and doing very well, and the fact of the matter is here in December, just late last year, we got a $4.2 million debt facility approved from a subsidiary of Rand Merchant Bank. That's a strong endorsement of our assets and our strength.
PM: David, could you tell our readers a little about your background and reasons why you joined Bullfrog?
DB: Yes. I worked in my first mine 51 years ago as a laborer, and then I graduated from the University of Arizona in 1964. Since then, I worked 13 years with five different major mining companies. I have then spent the last 36 years with private and junior companies, both developing and operating open pit and underground mines and process pits. I've done three IPOs. I was involved with starting up the High Croft mine at Allied Nevada, which is now expanding in a major way. So I've had a very solid background of half a century in this business in virtually all aspects of it.
PM: What are some of the goals and milestones that you and your management team plan to achieve in the next year and over the long term?
DB: We want to finish this third drill program on Newsboy and then do an updated, what we call a block model resource estimate, and that should be completed certainly before the end of this year. We'll take all the information we have and use a computerized estimation procedure, as well as doing some initial mine planning aspects, which is what we want to do there because we have 235,000 ounces of historic resources on Newsboy, and we've put in well over 50 holes now. We want to consolidate that into a new estimate, so that's a key goal. There are some other metallurgical investigations we want to do on optimizing how this ore may perform. We certainly want to expand the resources and convert the additional resources into reserves to make that project basically the best that it can be both in scale and type.
PM: That's great! That sounds very exciting, David what are some of the factors that make Bullfrog Gold Corp. a good asset at this time?
DB: We have the assets. We have three solid assets, and we are also always having our ear to the ground and looking at additional opportunities as far as acquisitions and so forth. We have the management. I have 50 years experience. The geologists I have that work with us, which there are 3 of them, have over 110 years combined experience. I have a solid CPA who handles all of the administration, auditing, accounting, SEC filings and so forth, so you have all the ingredients to build a mining company, and this is why people should buy our stock because we think we have a long way to run on both share price appreciation, as well as market cap. That is why I think people would be interested in pursuing a position in our company.
PM: In meeting with investors, is there anything that you wished they better understood about the company or the sector?
DB: Well, I think those three elements. We want to do several things. We want to raise money and put it in the ground, and then tell people about it and keep expanding. What we want to do is get our work done in the field, as well as in terms of investor awareness, and these are the ingredients that are going to take this company forward.
PM: Very promising. Let's move to gold for a minute, and what I want to ask you is, do you expect the price of gold to remain at current prices? Is it a bubble? If prices fall, do you believe your projects will remain cost effective?
DB: Well, I think the current price of gold is actually low. I believe it should be over $2,000. When you look at the economic situation, both domestically and globally, there is a strong demand for gold in China. Throughout the whole world, a lot of people have demands for gold for all sorts of reasons, not just for speculation, and so I think the future for gold is very bright.
Furthermore, I think the future for silver is even brighter. Silver has a lot of industrial demand. They are consuming more silver than they are producing, so I think between those two precious metals, I think we are well-positioned to take things forward, and under the current economic climate globally, both of these commodities have very bright futures.
PM: David, one last question. On a personal note, do you own any gold stocks, and if so, which ones? Any physical gold?
DM: Well, my biggest holding is in Bullfrog Gold Corp., and my second biggest holding is in Romarco Minerals (OTCPK:RTRAF). I was involved with them consulting for several years, and was on their board of directors for over eight years. I've got a considerable position in Romarco Minerals. I own silver coins, and I do own gold coins as well, so I have a lot of skin in this industry, and I believe it is going to pay off for me, as well as for anyone else who invests in this industry, as well as our corporation.
PM: David, thank you so much for your time, and until next time, take care, my friend, and good luck!
DB: Thank you, Patrick!
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in OTCQB:BFGC over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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