Margaux Resources (TSX-V: MRL) – Parallels to an Early Osisko? (Transcript)

CRUXinvestor interviews Margaux Resources (TSX-V: MRL) President & CEO Tyler Rice, and Linda Caron, the Vice President of Exploration. Lots of near term deliverables with a huge project. Speaking to Linda Caron, who is currently in the field, she seems very excited about what they are seeing: “Everyday we are coming back with new finds. We could be working on this for the next 10 years and we’d still be making new discoveries. This is a very big project”. IAMGOLD’s Steve Letwin himself said in a recent interview with CRUX that “This is Osisko in the early days, it’s that good”.

Click here to watch the interview.


Matthew Gordon: Good morning Linda. How are you?

Linda Caron: I am very well, thank you.

Matthew Gordon: Wonderful. We haven’t spoken for a few weeks. What are you up to the moment? I know you’re out in the field which is why we’re speaking by phone. What’s happening?

Linda Caron: I’m up in camp. I’ve been here for about a week this stint and the crews…we’re on our second rotation of crew. Making great progress. Seeing a ton of stuff. Really exciting times. Every day, people are coming back with new finds. We’re doing mapping and sampling. Just trying to get our head wrapped around this project. It’s a very big project and it’s something with a lot of historic work. But it was focused in a very narrow area. We’re trying to just do a first pass visit to some of the other areas, to look and see what’s there. A lot of the historic work was on the Table Mountain side where there’s the high-grade veins. That’s not our primary focus right now. We’re really more interested in the bulk tonnage target. So just re-looking at known areas where people had been. They noticed something interesting but they maybe didn’t evaluate it from the point of view of the bulk tonnage mineralisation.

Matthew Gordon: We interviewed Steve Letwin recently. He was very excited by what you guys have got. So that’s Steve Letwin of IAMGOLD, CEO. He obviously has a position in your company. You’ll have been talking and when he talked to us 2-3 weeks ago, he seemed to feel that this was the equivalent of Osisko in the early days. Which is high praise indeed. What are you seeing there whilst you’ve been up in camp?

Linda Caron: It just blows my mind at the size of this system. The Taurus area which is where we have the 1Moz Inferred Resource. That’s about a 2km x 1km footprint. And not all of that is part of the Resource, but you can see the alterations continue. But if you go a kilometre away there’s another system that’s the same size, that’s really had…there’s no Resource for it. Had very little drilling. And right now, we’re working up on a target called The Lucky which has a similar footprint size. All the same things we’re seeing. We visited another one yesterday, totally different area. I’m just seeing big legs to this system. I think that the focus has been on Taurus and I’m confident that’s real. There’s Gold there. But I think that there’s a whole number of other Taurus’ out there just waiting for us to develop them. And obviously that’s a long-term plan and it takes a lot of drilling. I was saying to Tyler last week, I think we could be working here for the next 10 years and we’d still be making new discoveries. It’s just that big of a system.

Matthew Gordon: That’s really interesting. My guess, if it’s the size and scale that you think it is, you’re going to need some help sometime down the line in terms of partnerships, joint ventures. Is that part of the consideration? Or are we just focused on trying to identify what’s there now?

Linda Caron: I think for now we’re just trying to get boots on the ground and get a really good understanding of what’s going on. And then, obviously it’s going to take it’s going to take a bunch of money, to really fully test this area. And it’s a long-term proposition.

Matthew Gordon: Well I mean talking of which, and we’re going to speak to Tyler in a bit. You guys have just raised the next tranche of money and you’re doing it in small amounts, steady, and spending that frugally as you told me last time. What are you planning on doing with that money?

Linda Caron: I Think for now, we don’t want to be too dilutive and we really think the shares are undervalued. They’re trading at $0.11 today. So things are starting to move in the right direction. But I think for this season, what we’ll be doing is updating the 43-101 Resource for The Taurus. We’re going to be doing a lot of mapping and rock sampling, just to identify other targets that we may want to drill next year. And we’re taking care of some of the outstanding reclamation issues that the previous operators, of which there have been many, really didn’t do a great job of cleaning up after themselves and that’s become a problem with the ministry. And we wanted to come in and do things right from day one.

Matthew Gordon: And take the hit on the cost of that. Are we talking a lot of money? Or are we going to make sure that the most the money’s going into the ground?

Linda Caron: One of the things is there’s a whole bunch of old equipment. There are some assets that are really no value to us. The specific tyres for a specific piece of machinery that we don’t own anymore, that are probably worth a couple of grand apiece. And the idea is just to sell some of that stuff and that should cover the cost of a lot of the reclamation.

Matthew Gordon: Okay. You really are being quite frugal. And obviously-

Linda Caron: We really are! We’ve got an accountant as a President!

Matthew Gordon: I’m going to have to ask Tyler about this – his possible Scottish roots. So when we last spoke the shares were at $0.07 and they’re now at $0.11. Obviously, that’s very positive. Is that factor of the Gold Spot price going up or is that a factor of people starting to listen to your message?

Linda Caron: I think it’s a messaging issue. I still think we’re tremendously undervalued but I think we’re starting to get recognition. People didn’t know who we are. It’s a new project for us. And you can talk all you want but until you’re on the ground, it’s just talk. A lot of people were waiting for that June 20th shareholder vote from Wildsky Resources because that was sort of the final piece we needed to say that the deal was done. So since that day, we’ve had that news release you saw which had some of the historic drill results. And we just searched the database and we were looking for anything that was bigger than, thicker than 100 meters and better than a gram. And there are a whole bunch of those. And that’s a really good quality intercept and it’s a sign that the system is robust. It’s not just little veins with mineralisation spread over a big interval. We’re talking long continuous mineralised intercepts. And that’s what you need in these bulk tonnage systems. We’ve been waiting on that news release until we knew we had the property for sure. After that June 20th shareholder vote went through, we put that news release out. And I just think we’re starting to get attention. People are watching now, people are listening.

Matthew Gordon: I think that’s right actually. We’ve certainly had a few questions thrown at us with regards to what you’ve done after the last interview we did with you. People are keen to know more and we should arrange to speak when you are perhaps you back from the field with more of a view of what’s going on. But let me ask you about the announcement from last week, which was the Cassiar Drill data review. What were you trying to achieve and what picture has that been able to paint for you?

Linda Caron: What we were trying to achieve is to show people that this is a big robust system. And I think that those intercepts do that. Now the first one in the list, and I don’t have it in front of me, but we did two columns of data. One is actual assays, composited assays over the interval. And then sometimes there are very high-grade values because there is coarse Gold in this. If you happen to get a flake of coarse Gold in the core sample, the value is very high. If you don’t, the value is lower. One of the things that the industry typically does, is take that very high value and cut it way back to a more appropriate number. So we chose 30 grams to cut it back. And you can see the first interval in that table, the grade just about goes in half because it’s being weighted by a couple of really high-grade intervals. But the second one in the table doesn’t change at all. We’re quite confident that the Gold is there. The average grade is right and we may actually get an upgrade in values. One of the things we want to do when we drill it, is to use a larger core size. If we use HQ core, which is quite a large diameter, you capture a bigger sample. You have more of a chance of capturing those Gold flakes so getting a better representative estimate of the Gold’s value. All the previous drilling was much smaller. I think that by using bigger drilling we’ll actually see the Gold grade go up in that in that Resource.

Matthew Gordon: Well that’s exciting. That infers additional costs. Is that part of your planning in terms of your cost going forward?

Linda Caron: It’s not that big a deal. We’ve put out some tenders for drilling. We just told the guys what we wanted for core size and we got some really competitive bids in. I think the industry is a little slow right now. Drillers are hungry and people want to get in on the first program with us, on a project that’s going to go on for many years.

Matthew Gordon: Can we just talk about James Maxwell? Obviously, we know him from Sabina Gold & Silver. How did he get introduced? Why we brought him on board? What’s he going to do? What’s the value that he’s going to bring to the table?

Linda Caron: So that’s probably a better question for Tyler. I can speak briefly about it. But he and Tyler have a relationship. He’s certainly somebody that is known to our  technical team. We’ve all followed the successes in his career. He’s a technical guy. He’s very experienced in the junior sector. Sometimes we get complaints from shareholders that we’re not as tuned into the junior markets. We’ve got the big guys that can help us develop the deposit. But the process to get there is lacking and I think James is going to be a tremendous asset. He’s well connected in the industry. He’s well-respected and he’s got experience on this style of deposit.

Matthew Gordon: A note from the press releases, he’s responsible for finding 5Moz with Sabina which obviously helps. And of course, it’s quite easy to forget your ex-Kinross. You’ve got Kirkland Lake there and you’ve got IAMGOLD. It is big boy experience which I guess is very useful. But as you say, no bad thing to have someone like James come in and help at this stage. Okay Linda. Well thanks for the update. Let’s try and get something in the diary for when you’re back from your field trip and maybe have a proper chat then, and you can tell us about what you found.

Linda Caron: Sure. Let me give you one little anecdote before we close. So visible Gold in rocks is hard to find. And many geologists would go their career and not find samples with visible Gold. So yesterday, we’ve got a young fellow working with us and we’ve had him on some of these reclamation tasks. He’s just been here for a week now. And yesterday was his first day out with one of the geologists mapping. And they’re up at this new prospect, never been drilled and they come back at the end of the day, his first day in the field, and they found visible Gold. So super exciting. And it’s just every day is like that. Every day somebody is coming back with a new discovery, new alteration, new veining, new area. It’s just a really, really upbeat camp because it’s just so exciting.

Matthew Gordon: Well that’s genuinely fantastic. I’m very pleased for you. Long may that continue. We look forward to hearing more about it when we speak to you next.

Linda Caron: Yeah sounds great.

Matthew Gordon: Linda thanks very much. We’ll let you get back, I know it’s the start of your day there and you’re about to go and discover more Gold by the sounds of it today. We’ll let you do that. Thanks again for your time. Appreciate it.

Linda Caron: Thanks Matt.


Matthew Gordon: Morning Tyler. How are you?

Tyler Rice: Great thanks, and yourself Matthew?

Matthew Gordon: Not bad. It’s been a while. Good to catch up.

Tyler Rice: It has, lots of going on here.

Matthew Gordon: You’ve had some exciting news since we spoke. You’ve had James Maxwell join you, the Sabina Exploration Manager. That’s a great addition to the team. So why has he come on board? How do you know him? Who put you together?

Tyler Rice: I’ve known James for a number of years through mutual contacts. I connected with him at a number of mining conferences and as I got to know him in greater depth, and realising that he was a significant contributor to the growing of over 5Moz of Resource for Sabina and other properties that he’s been involved in. And having 20 years of experience as a manager and a professional geologist, he just really tweaked one of the gaps that we have within our organisation, from the junior mining perspective. Given that we’ve got Kirkland Lake, we’ve got IAMGOLD. We’ve got some great, big, strong names associated with our organisation, so we were able to fortunately invite James Maxwell to our special Advisory Committee, and he joins us Steve Letwin on that. And then rounds it out with Chris Stewart who is on our Board of Directors, who is the President of McEwen Mining.

Matthew Gordon: Pretty punchy Board and Committee you’ve got there now. I spoke with Linda earlier. She seems very excited with what she’s seeing in the field. Anecdotal at this point but she said she’ll come back on and tell us a little bit more about that in the next couple of weeks when she gets back. But to that point, you’ve raised a bit of money recently, for the next phase. Can you tell us how much you’ve raised? What are you allocating that to?

Tyler Rice: The second tranche that we’ve just recently closed of $550,000, Canadian of hard and $160,000 of flow-through is going towards mostly field work, mapping and getting our geos up to speed with the property, prior to dropping drill bits in. In addition to that, we’ll be updating our historic Resource that’s on the property for a million ounces of Resource. And we’ll also be working on a number of the reclamation matters that we inherited with the property. And that’s some low hanging fruit that we can clean up and move forward to build stronger community relationships, but also to demonstrate to the ministry that we are attending to the matters that were left behind by our predecessors.

Matthew Gordon: You’re having to stump up the cost for that. Are we talking significant money? We talking tens of thousands, hundreds of thousands, how much?

Tyler Rice: This year our budget is going to be around $78,000. Environmental costs associated with water monitoring and policy preparation with regards to some of the matters that were left behind. And the reason why we were able to get the property so cheap is because we have an ability to demonstrate our attention to dealing with these matters. And that’s part and parcel to the tailings remediation work that we’ve done in the past as well.

Matthew Gordon: Is that all going to come out of this current raise or whatever cash flow you’ve got left? Or is that going to maybe move over into the next raise, whenever that is?

Tyler Rice: That’s coming out of our current raise.

Matthew Gordon: And what else are you planning to do? Where’s the value coming from in terms of the next spend as it were?

Tyler Rice: The value for the next spend is really the lift on going from not having a Resource to having to a compliant 43-101 Resource. And that’s been engaged and kicked-off so that we can start the requisite QA/QC to move that forward so we can exit this calendar year with a compliant 43-101. And that’s to me the biggest value. We’re supplementing that with having our geos in the field doing the mapping, cataloguing historic information and going through some of the equipment on site that has substantial value but not necessarily to us. For example, there’s a number of wheels on site but we don’t even have the unit that is correlated to said tyres. So we’re looking at liquidating some of the assets on site that doesn’t have immediate value to our organisation. And that cash can then be turned around and utilised to create further shareholder value.

Matthew Gordon: It’s all small stuff in the scheme of things. The core focus has got to be the identifying where you’re going to drill. A bit more sense of what you’ve got. Obviously, you’ve been doing a little bit of this, a little bit of storytelling in the marketplace. Share price went from $0.07 from when we last spoke to $0.11 at the moment. Where do you think that’s come from? Do you think that’s just because the price of Gold has gone up or do you think it is because you’re better at telling the story in the marketplace? What’s happening?

Tyler Rice: June 20th was a strategic day for Margaux Resources as that was the day when the shareholders of Wildsky voted and approved the transaction. A lot of our ability to tell the story and get our message was subject to that approval. And now that we’ve bypassed that, we’re seeing Gold back into the spotlight it’s a combination of both. But given our ability to now state that we unequivocally have the Cassiar property, that gives us a stronger message.

Matthew Gordon: I think since we’ve been talking, you have always done what you said you were going to do. Which is great. We have talked in the past about identifying other M&A activity, and targets. Are those sorts of conversations happening?

Tyler Rice: Right now we’re looking at our current acquisition at the Cassiar and triaging the properties that were inherent with that acquisition. And as you’ll note from Linda, every day we’re coming back with new opportunities within the 60 ,000 hectares of land that we just inherited with the transaction. And so yes, we keep our eyes open for other alternatives in British Columbia. But we do have a bit of a blinder until we have fully triaged our recent acquisition.

Matthew Gordon: What have got, you’ve got 60,000 acres, or is it hectares?

Tyler Rice: Hectares.

Matthew Gordon: My goodness, that’s a small country. I guess you’ve got a lot on your plate as it is. But that would be interesting to see how that develops out. So what are you excited about for the next quarter?

Tyler Rice: For the next quarter, getting everything ground truth. Having our geos continue their mapping. When we have geos coming back with visible Gold, it’s exciting every day. And identifying where we’re going to plunk down that first drill hole. And then ultimately, looking at our 43-101 complaint Resource. I truly believe that’s the ultimate piece that’s going to move our needle more strongly.

Matthew Gordon: Tyler thanks for the update. Appreciate it. I look forward to getting the next piece of news from you. Let’s catch up in the next few weeks when things have moved long a bit.

Tyler Rice: Absolutely. Thank you for your time Matthew.

Company page: www.margauxresources.com

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RNC Minerals (TSX: RNX) – 390% Increase in M&I Resource. News Release 27th June 2019 (Transcript)

CRUX investor sat down once again with Mark Selby, CEO of RNC Minerals (TSX: RNX). We ask Mark Selby about the latest drill results, Zone A, exploration, mining plans, resource update timing, Higginsville Mill plans, GDXJ Index, Dumont conversations, share price and the news of the recent Cobalt 27 acquisition by Pala Investments.

Click here to watch the interview.


Matthew Gordon: We will be speaking in a second to Mark Selby. He’s the CEO of RNC Minerals. We spoke to him a month ago and he’s going to give us an update as to what’s been going on since then. They had a press release out this morning about their drill results in the Western Flanks of their Beta Hunt project. But we’re also going to be asking about Zone A, exploration drilling, his mining program, the resource update due in Q3. Higginsville, the GDXJ listing, Dumont and his opinion about the recent Cobalt 27 acquisition. So Mark, hi how are you?

Mark Selby: Great sir. How are you?

Matthew Gordon: Not too bad. Now you’re doing the rounds in Toronto. I know you were in New York also recently.

Mark Selby: Obviously with today’s release, it’s getting lots of attention and lots of investor enquiry. So it’s been a good day.

Matthew Gordon: Well that’s why we called. So obviously we’ve been through the press release. Do you want to give us the highlights in your own words?

Mark Selby: The key thing there is when we bought this asset two years ago, we wanted to drill out the Resource, get a mill in place. And today’s Resource is a vindication of what we saw as the massive Resource potential for the mine itself. So what we announced today is just for Western Flanks. 710,000oz M&I Resource and another 250,000oz of Inferred. Almost a 1Moz combined. At a discovery cost of less than $5/oz. And Western Flanks remains open up along strike and at depth as well. And again we think these structures can continue for many hundred metres, so we’re very happy with the results today. And now we’re entering a phase the exploration we’re going to start to step out… Now we’ve proven what the potential of one of these shears looks like, we’re going to step out and start to highlight where the Gold that we think exists is in some of the other shears on the property.

Matthew Gordon: That’s a great point to bring out. So this was just along 1km of one shear and you’ve got another three shears of aggregate 4km.

Mark Selby: Exactly. So lots of room to go find a lot more ounces.

Matthew Gordon: I’ve got to talk about the cut-off grade. Now that’s shifted from 1.8g/t Au to 1.6g/t Au. You’ve got a grade tonnage curve diagram in the press release, we can see that. But maybe it’s worth just explaining that for people, why you’ve done that. In fact why couldn’t you go lower?

Figure 1: Grade tonnage curve for Western Flanks Resource – Measured and Indicated Resource only (CNW Group/RNC Minerals)

Mark Selby: I think with our own mill and with the mining costs that we think we’ll be incurring on a go forward basis, we think that’s the appropriate cut-off grade. I think you highlighted the grade tonnage curve there, and the point we made in the release is that there’s 450,000oz of that 750,000oz is at 4g/t. So where we’ll end up in a mining plan, which will be out by the end of third quarter, was likely somewhere between that 3 and 4 grams. And it gives us lots of ounces to work with.

Matthew Gordon: And I’ve noticed you are also quite careful in the release to talk about, and focus on, the bulk tonnage and not the High-Grade ‘nuggety’, I think is the word of the day, Coarse Gold. Why was that?

Mark Selby: We can’t put a Resource around it, so it will be bonus ounces and bonus grade on top of whatever we have in the base Resource today. So that’s the way that investors should think about that going forward.

Matthew Gordon: I think it’s quite a well-written press release so perhaps people should have a look at and there’s a few diagrams that are definitely worth looking at. You’ve also got a lot going on. And we haven’t spoken for a month so I want to take advantage of you today. There’s a lot going on. There’s obviously Zone A. You may be making an announcement on that. When is that due?

Mark Selby: Yeah. So the way we’ve done it, we’ve got the Western Flanks Resource out first. We’ll get the A Zone out probably sometime in the first half of August. And we’ll, in one technical report file, 45 days from now, we’ll have the report for both of those Resources. So it’s not as big…it’s not as thick as a Resource as Western Flanks. So we’re not going to see the same total ounces. But we should see a good bump in the Resource from what we had in 2017.

Matthew Gordon: And between now and then you continue to drill?

Mark Selby: So we’ve got to the one drill left that’s working on the exploration holes. Again the diagram in the release shows where the Fletcher Zone is. In 2016 we put one hole out there and hit 25m at over 2.5g. Mineralisation looked very similar to what we had a Western Flanks. We have our East Alpha, which is on the other side of the A Zone. And from the historic Nickel drilling, we literally have hundreds, if not thousands, of historical intersections from the Nickel drilling that highlighted where the where the Gold was. So we’ve got lots of targets to go after. And in this phase of the drilling we’ll be able to start to do that.

Figure 2: Long section of the Western Flanks (looking east) Mineral Resource colour-coded for 2019 resource classification and compared to December 31, 2017 mineral resource estimate. Note that all material mined has been depleted from resource. (CNW Group/RNC Minerals)

Matthew Gordon: When we last spoke you made a fabulous announcement in terms of the mining component. You’ve continued to mine. And you continue to make discoveries. When do you expect to be able to talk about that?

Mark Selby: We’ve been mining along that 16 level. So we pulled out initially 1,000oz. We pulled out a little bit more. From there we’ll end up seeing what the final number is once we get that Gold processed in the next week or two. But the key thing there is we’ve gone at the intersection of the set of shears three times, and we’ve hit it three times on the 14 level, 15 level and now the 16 level. We still have all of those stoping blocks left in between. And we’ve been pulling off a 1,000oz to 2,000oz per 5m level. You can do the math to see what the potential High-Grade coarse Gold that we might find once we stope those areas out. And that’s stuff that we’ll be doing between now and the end of this year.

Matthew Gordon: Okay. I think we spoke previously about a Resource update in Q3. That’s still on schedule?

Mark Selby: Yeah. That’s correct. It will be a Reserve update.

Matthew Gordon: A Reserve update.

Mark Selby: So we’ll have the first Reserve for Beta Hunt Gold in the mine’s history.

Matthew Gordon: Which is obviously great news. I think everyone is expecting great things because they have done the maths as you just asked. So the planning for the mine. That continues to evolve at the moment. Have your plans changed in terms of the kind of rigour and planning that you’ve put out so far?

Mark Selby: No. The first step in that was always getting a comprehensive Resource in place which we’ve got for Western Flanks and we’ll have shortly for the A Zone. And using that base we’ll look at the mine plan. Fundamentally, because of the scale, the thickness, Western Flanks that 10 to 40 meters wide. It provides us lots of opportunities to look at different ways to mine it. Potentially a lower cost way to mine it. We’ll see when the mine plan comes out. But we’re quite excited to have this much Resource to work with. Which should deliver a multi-year Reserve for the mine, which is ultimately where we wanted it to get to when we acquired it back in 2016.

Matthew Gordon: Well talking of which, obviously the recent acquisition, and you did touch upon it earlier, Higginsville. That obviously comes with a few ounces in the ground too. I think some people are curious as to what you’ve done in the last month since that deal closed. And do you have any sense of what the mix between Beta Hunt ore and Baloo ore will need to look like or could look like? Or is that still a work in progress?

Mark Selby: So it’s a work in progress. But with Higginsville, whenever you acquire an asset, the key thing is to get the people right. So our team there has been actively managing that integration. That’s gone well. We’ve ran our first batch of ore through. We don’t have the final numbers yet but based on the amount of Gold we’ve poured. We think that the mill performed quite well. We’re doing one of the last third-party tolls from there, and then the remainder of July, August and September is going to be focused on Beta Hunt and Higginsville material. By September we should be having quantities of ore from Baloo to feed the mill. And we’re looking forward to a decent Q3 and then a good Q4. Which hopefully we’ll be ramping back up Beta Hunt to whatever we think the optimal level is from the Reserve. Mine plan and Reserve update, that’ll be done at the end of Q3.

Matthew Gordon: Two questions that come out of again from listeners and viewers, is obviously you continue to do work there. What’s your expectation in terms of the All In Sustaining Cost (AISC). You had a number previously. You’re going to be doing this work to optimise that. What do those savings mean in the new environment we’re in today?

Mark Selby: I think in terms of All In Sustaining Cash Cost, we should come out somewhere in the range of $900oz to $1000oz. We can do better than that. Certainly will. And that assumes the zero High-Grade Gold. So any of that will help increase the denominator and help bring that number down.

Matthew Gordon: You used the word earlier ‘vindicated’. So you feel that this… you’re on the way to vindicating the decision to acquire this. Because you had a few critics at the time. I think the chat rooms would bear out that perhaps people think that’s now quite a smart call of yours, especially with Gold having done what is done in the last couple of weeks.

Mark Selby: With Gold at $2000 an ounce.

Matthew Gordon: Australian dollars.

Mark Selby: $2000 Australian dollars an ounce. Yes. With Australian dollar. With Australian Gold at that level. Having done that mill deal when we did, was very fortuitous because there’s lots of low-grade open pits scattered throughout the Kalgoorlie region. And with Gold at these levels there’s going to be a new surge of ore. Looking for a mill to process it, to take advantage of these high Gold prices. So we are in the position over the next six months here, that as people who are looking for capacity to process, we are one of the few people who have it.

Matthew Gordon: Remind me what the mill capacity is?

Mark Selby: Basically, it’s about 1.2Mt per annum.

Matthew Gordon: And what does that work out a day?

Mark Selby: That’s about 3,500 tons a day.

Matthew Gordon: And you think that’s the limit?

Mark Selby: No I mean there’s potential to expand it further. Westgold Resources was looking at options to make it a larger mill. So for the right opportunity, if someone’s looking for a capacity to mill a sizable Resource, if it makes sense for our shareholders and creates value for shareholders that it’s something we’ll take a look at.

Matthew Gordon: I don’t quite understand the process for optimising or upgrading it, but is that a quick to market process?

Mark Selby: It depends on how much you would want to expand it. Right now we want to focus on filling what we have. But there’s a number of different projects in the area and if there’s an opportunity that makes sense we’ll it will definitely take a look at it.

Matthew Gordon: And you have made a statement previously that you believe that the grades will improve at depth. Do you still feel that’s the case with a new data that you’ve got?

Mark Selby: I think that’s one of the things and we highlighted it in the release, was the final hole of that Western Flank’s campaign, which is sort of the deepest northern most hole. It had a fairly consistent grade across the intersection at over 6g/t. So we’ll see when we continue to drill further north and further down and see what happens. But if the grades continue at those levels then that gets too a pretty exciting grade going forward.

Figure 3: 3D View of Beta Hunt gold resources and Exploration Targets (CNW Group/RNC Minerals)

Matthew Gordon: Okay. Well let’s step back and we’ll wait and see. What is the focus between now and December then for you? You’ve got a lot of moving parts here. And I’m looking at the share price today, hasn’t really moved on what is now reasonably good news. I think maybe a few people taking the chance to cash in. Which is fair enough. Name of the game. But for you, what’s important?

Mark Selby: We’ve been focused on getting a multi-year Reserve mine plan in place for Beta Hunt. And so that remains on track. And we will look to have that in place by the end of the third quarter. Based on that we will then look to ramp up the mine to the level that that mine plans suggests, makes the most sense and creates the most value. At Higginsville, we will be looking to get Baloo into production by September. And then between the optimisation between the Higginsville property and Beta Hunt, in terms of feed for that mill. And then on the Dumont front, we’ll be continuing to resume discussions with a number of people around partnering and financing on the Dumont project.

Matthew Gordon: Well that’s great. That was one of my questions actually, have those conversations started up again or are they about to resume?

Mark Selby:. They’ve been ongoing. One of our team was just in Korea last week, so those discussions continue in earnest.

Matthew Gordon: Also by the way, congratulations on getting on the GDXJ Index. I think people perhaps haven’t given you enough credit for that. I was talking to the CEO of a $700m market cap company who is very keen to get on the Index. You’re obviously a lot smaller than that but you’ve a very enthusiastic following and trading which I think has got you on that. So congratulations.

Mark Selby: Thanks. And that’s the thing too is, liquidity in the stock is something that’s important to join an index. And so that consistently good volume that we’ve shown through September is what allowed us to join it. And obviously we were quite happy with the response post the index listing last week.

Matthew Gordon: I think it’s important to note that, the importance of it. Obviously again, looking back to from September to now, shares 9x higher than they were then. Which is great. But you just turned the corner. So getting back to where you were. Are you feeling confident with the news coming through that people should start reacting to that in the marketplace? And if so is it going to be institutional or retail?

Mark Selby: I think that one of the big things about this Resource update and then the A Zone Resource update to come, and then a Reserve, is I think for some institutional investors relative to the Resource base that we had at the time, valuations look pretty rich. So the fact now that we’re getting some pretty robust Resource and hopefully robust Reserves in place, we will make it a lot easier for them to step into the story and step in a meaningful way. Fundamentally for investors today, yes the share price is up quite dramatically. But my beliefs always been is that we acquired this asset because there’s a 5km ramp system sitting above what we think is 4 shears across +4km. And so once we start demonstrating the Resource potential of those shears, which I think today’s announcement is a major step forward on that, the reality is there’s very few multi-million ounce Resources available in low-risk jurisdictions around the world. You have a bunch of Aussie mid-tiers that are cashed up with well valued paper. You saw some transactions that occurred during the last month. I think over the next 6 to 12 months, if we continue to do what we’re doing, we may start getting a few knocks on the door. Or maybe more than a few knocks on the door.

Matthew Gordon: Well you’d hope. Just to finish off because I know your time is tight, you’re running around the city at the moment. We got into this because we appreciated the rigour and the planning and the thought and the strategy to this, and you’ve always said from the start this is going to be big. Question is how big. You’re now telling that story to the institutional brokers, the Haywood’s, the Cantor Fitzgerald guys. How are they reacting to what’s going on over the last couple of months?

Mark Selby: I think getting the mill, milling solution in place took a big question mark around the asset away. I think it’s one thing for a CEO to say, ‘oh we’ve got a massive Resource potential’. It’s another thing to deliver 700,000oz of incremental Resource at a discovery cost of less than $5oz. I think it ticks the question mark around what the potential could be now that we’ve demonstrated for one shear. This next round of drilling is really going to step out and test some of the other shears. And I think really start to show what the potential of this asset could ultimately be.

Matthew Gordon: And you think technically things are going as expected, as you planned? There haven’t been any hiccups since when we spoke last?

Mark Selby: No. Beta Hunt’s working well. Higginsville, the integration is going well. We’ve got a great team in Australia in place. And with the Dumont update as well, we’re firing on all cylinders on Dumont as well.

Matthew Gordon: Well talking of which. Cobalt 27. They just did quite an enormous deal with Pala Investments. Do you think that’s been a good deal for Cobalt 27? For investors? For Pala?

Mark Selby: Well I think with Cobalt 27, now becoming Nickel 28, I think it highlights what some of the potential is in the Nickel space. I think the portfolio of assets they had, between royalties and mining assets and stuff that is more Nickel and less cobalt, or more Cobalt and less Nickel. It helps to separate the assets and bring some clarity and focus to each of the portfolios. I think they’ve got a very fundamental belief in where Cobalt is going and it’s a transaction they’re paying a premium for.

Matthew Gordon: It’s interesting, I think congratulations due to Anthony. We’re speaking to him shortly actually. And by inference yourself with Dumont. Don’t forget Dumont, it’s a big part of this story. Well congratulations by the way. I just want to say that. It’s been a good month, been good month for shareholders I think. You’ve got to keep it going. The hard work has just begun. But also please pass my congratulations on to Russell Starr, he did a great presentation recently. I think anyone watching this, should maybe look at Russell’s presentation as well that he did. I think last week.

Mark Selby: Yeah. At the conference in the US there.

Matthew Gordon: Yeah, perfect. Okay well I’ve taken enough of your time. I know you were you were rushing off.

Mark Selby: Okay. Thanks Matt. It’s great to catch up and we’ll be catching up again soon. 


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