We caught up with with Tyler Rice, President and CEO of Margaux Resources , as well as comments from Linda Caron, VP of Exploration, Kaesy Gladwin, Senior Geologist and Scott Zelligan, a Consultant who worked on the historic resource update.
This is probably one of our favourite small mining projects. It’s a gold bulk tonnage play with some high-grade upside and a lot of historic drill data. We’ve seen these work but the management will need to be cognisant of how to develop it without large dilatory financings. We typically don’t spend much time looking at this end of the market but there is the sheer scale here. The G&A is low and the team is experienced in Orogenic Gold systems. This opportunity is something that we are interested in. It has been described as the next Barkerville Gold and an early stage Osisko. Nice parallels and the early signs are good, but still a lot of work to do – one to watch for sure as it is still cheap.
Also, their tailings project (600,000t @ 1.2g/t) could potentially net them $4M-$5M cash if they outsource the processing. Tyler indicates that they are evaluating this but do not expect it to happen in the next 12 months. The recent Maiden Resource of +1Moz puts them on a firm footing but what next?
- Recent News: Funding and Announcing The Maiden Resource
- Company Financials: What is Their Cash Position and What Are They Going to Do With The Money?
- Gold Market Conditions
- Tailings Project: When Are They Moving it Forwards?
- The Expert’s View: Geologists Explain Their Excitement Over the Projects
Matthew Gordon: It’s been a while since we spoke. I wanted to catch up and see how things are going. This is one of our favourite smaller exploration stories in Canada. I notice a couple of things had come up. Obviously, you’ve updated the historic resource like you said you would. And also, there’s this raise. Can you tell us a little bit about what’s going on? Seems to be quite busy.
Tyler Rice: Very busy, indeed. We’re very excited about the recent announcement with regards to our 1Moz Resource, at 8.7g/t cut off, which results in an average rate of 1.43g/t. In addition to that, we recently announced the financing of $750,000, which will go towards our winter season of interpreting our field season data that was obtained by Kaesy and Linda.
Matthew Gordon: We’ve arranged to speak with Kaesy and Linda later. We’re going to catch up with them and find out what’s been going on in the field. What else is the money going to be used for? Obviously looking at some of the samples that you’ve picked up in the summer which is great. What else are you doing in terms of driving that share price? Since we last spoke, you were at $0.05 cents. You’re now up to $0.09 cents. Things are moving the right direction.
Tyler Rice: In this bull run that we’re seeing for gold and expected continued run for the price of gold, having two major properties in a safe jurisdiction in British Columbia, Canada; One being in the south at the Sheep Creek and one being in the North at the Cassiar property, which have both been identified by Dr.Murray Alan’s report through BC Geoscience as comparable to Barkerville, from a geological plumbing perspective. Most recently, we focused our field season up at the Cassiar property, which is 60,000 hectares of land. We inherited a substantial amount of data and our field crews went through the data. They went out to the field. And not only did they look at the work that was done previously, they expanded the thinking of lower-grade, bulk tonnage type deposits within the past great high-grade veins. And so, Linda and Kaesy will speak directly to that. And the excitement from our geos is second to none.
Matthew Gordon: I’m looking forward to that conversation. We spoke with Steve Letwin a couple of months ago. He was really excited about what you’ve got. He’s really excited about what’s going on there. He compared you guys to early stage at Osisko. That’s kind of high praise and which is why we’re following this story. Can I ask about market conditions, obviously last couple of months, gold has moved. I think that’s clearly going to have an impact for gold producers. Has it has done much for you guys as junior explorers?
Tyler Rice: Some of the sentiment that has come out of Beavercreek recently is that the momentum that we’ve seen for the run up of the majors hasn’t quite hit the junior sector yet. And so, we are in a right position with the announcement of our Resource to get consumed by that vacuum that’s going to be coming down the pipe as the communication of the successes in the gold space contribute in the mainstream media .And with majors calling for $2,000 gold and beyond there’s going to be that vacuum that we’re going to get sucked up into.
Matthew Gordon: You’ve kind of got to work out where you fit in the cycle. Are you going to hit this gold cycle or are you preparing yourself for the next gold cycle? And I guess your data analysis will tell you that. There was one project which I was really excited about when we spoke last, which was this tailings project. You had something like 600,000 tons of tailings. And I think previous data suggested it was circa 1g/t or just over a gram. Have you managed to move that forward any or has that not been a focus for you?
Tyler Rice: For the field season this year that wasn’t a primary focus. We continue to evaluate that as a near-term cash flow opportunity. And that’s going to be part of our winter work from a permitting perspective to evaluate that launch in the next couple of years.
Matthew Gordon: That’s kind of an interesting strategy if you think about the amount of money that’s sitting there on the surface, ready to go. What are the things the needs a look at to make that decision? I appreciate you’ve got to fit it in around available money that you’ve got today to be able to do that, finding strategic partners to be able to maybe do that and working out what the plan is, but it seems to be a lot of money to be left on the ground.
Tyler Rice: But relative to proving up a 43-101 compliant Resource of 1Moz which definitely migrates us into a new category. That was our primary focus. And there is further associated low-hanging fruit around that that will position us for a bigger picture opportunity as we see this rising gold price. We continue to work on that initiative and the focus there is looking at the recoverability of that historically processed material.
Matthew Gordon: When do we expect to hear some news about how you’re going to move that forward?
Tyler Rice: Over this winter.
Matthew Gordon: And then I guess with 60,000 hectares to go and explore, there is this need to maybe do a second… I know you’re doing a financing now, but you’re going to have to go back out to market at some point, presumably next year, at some point after the winter analysis. Any sort of sense of how much money you think you’re going to need to raise for that?
Tyler Rice: We haven’t finalized the budget for next season because we’ve gotten so many new opportunities and targets that have been identified from this field season. As we get the results back from the chip sampling, soil samples, other field work that’s been conducted. Then we can articulate the drill program for next season.
Matthew Gordon: I managed to catch Linda briefly on a call. She seems very, very excited about what’s going on up there. New discoveries every day. Thanks very much for that update. Keep in touch with us. We’re keen to see how this goes. You’re one of the smaller companies that we look at, but a very exciting story. And like I say you’re delivering for shareholders. You’ve got to keep doing that.
Tyler Rice: Having a million-ounce resource in a bull market, having strong supporters such as Steve Letwin, who will be participating in this financing and having a Resource up North at the Cassiar property that has so much infrastructure. One of the new discoveries is 30 meters from our camp, which means it’s 30m off Highway 37. Our field crews literally walk to that location from our office and the opportunity is so great.
Linda Caron: Bottom line, I would say this is an outstanding potential, huge upside potential. The thing that sticks with me most is the size and the strength of the gold system there. Literally 15km over one mountain range, through the valley, up another mountain range. And you’re still in the same mineralizing system. Not that it’s mineralizing absolutely everywhere in that 15km, but you can see that you’re still part of that same system.
Kaesy Gladwin: We’re not just looking at the gold veins. That’s a nice little upgrade. We want to see a big system. It’s going to have lower grades, but it’s going to be more exciting because it’s bigger and it’s shallow. And it’s got these exciting quartz veins that have gold in them all through. But that’s an upgrade. That’s a sweetener.
Scott Zelligan: There’s a really good system there. And they have a ton of data that’s in pretty good shape. There’s a bit of work to kind of organize it all.
Kaesy Gladwin: There’s been a lot of operators. They’ve been taking a different approach. They had a different focus. They did some great work. But to have one company holding the entire property, as Margot does, really opens things up to look at a regional scale and say, OK, we’ve got these high-grade veins. We’ve got these smaller targets, these tight, confined things. But how does the system as a whole fit in? Because you’re looking at such a large area, you’re talking about 15km or 16km, much of the area has not been examined for a bulk tonnage targets. And I think this is a huge opportunity. When I started looking at the data, I thought this is something I’d like to really get into.
Linda Caron: There’s a lot of value in that data. The Taurus area is in the valley, not a lot of outcrop. So back in the mid-90s, they did IP. 25 years have passed since that that work was done. It was really good quality data, but the processing techniques have changed. So, we just took three lines of data right over the Taurus zone and we had that digitized and re processed. And within those three lines, we can see new targets that look just like the Taurus signature that don’t have a drill. So that’s what the old data does for us. It’s just generating new places for us to look.
Kaesy Gladwin: What you see in the resource model or in the mine maps or in the surface outcrops is all the same story. It’s a high-grade vein and that’s got alteration that’s very visible, very standardized across all these properties, so previously differently held properties. It’s easy to recognize the alteration, it’s easy to follow it and it’s easy to pick up pieces that are high-grade. Of course, those are the ones we get excited about. I know talked-about visible gold before. That’s a wonderful thing to see. But in terms of a bulk tonnage model, you really have to incorporate those at the margins of the veins. And in a lot of cases, historically, those areas weren’t even sampled because it’s not the focus. It wasn’t the mandate at the time.
Scott Zelligan: It’s a huge system. So, there’s a lot that hasn’t been explored. So, on top of the existing resources that are hopefully easy to exploit, there’s a lot of potential for new stuff.
Linda Caron: One of the really interesting targets is called Wings Canyon. I’m not exaggerating. It’s about 500m from the east side of the tourist deposit. You walk across to this zone, you don’t cross a single outcrop. There’s not a drill hole in that 500m zone. You get to the edge of this canyon and as far as you can see, east, west, up, down in all directions is alteration and veining. And there is no drilling between that and the Taurus zone. So, I think the potential for expansion for new areas, for new discoveries is really very, very good.
Kaesy Gladwin: This is a really great opportunity. The access on the property is really good. There’s a lot of historic roads.
Scott Zelligan: All the trails, you can get everything by the truck. You don’t have to use a helicopter or anything expensive to mobilize. Once you get to extraction, build any roads or anything.
Kaesy Gladwin: It’s not like you’re clinging to the side of a mountain slope or anything like that. You can move things and you can get your fuel cheaply. You can get your personnel to site. You can get your samples in and out and your equipment moved. And that’s exciting as far as controlling costs and also being able to test more targets.
Linda Carron: Table Mountain, half of the project, they never even looked at the bulk tonnage possibilities. All they were doing was following high-grade veins. So, there’s 2,000 drill holes on Table Mountain. We’ve got all the logs, we’ve got all the data in the database. Mostly they didn’t sample what looked like low-grade and we’ve got that drill core. We can assess some of these areas very cheaply. We don’t have to drill a new hole. We just have to go to a hole that’s already been drilled and sampled.
Kaesy Gladwin: Everything holds together really well, both geologically and in terms of the database. It’s a really well compiled project that we’re excited to take. I’m excited. We’re all excited to take it to the next level.
Company website: https://margauxresources.com/
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