Recently, CEO Greg Beischer presented at the Denver Gold Group Explorer and Developer Forumin Colorado Springs and we were lucky enough to get our hands on his presentation to share with all of you.
In the presentation, Greg provides an update on the current state of our company and covers numerous projects including Treasure Creek, Ester Dome, and 64North projects in Alaska.
To make it easy to digest, I’ve pulled out the key highlights below.
Key Highlights: 0:39 – Greg provides context on how the Apex Gold project came about and how Millrock attracted the interest of a mid-tier mining company to partner with. 0:31 – An explanation of the Project Generator model and shows how reduces investor risk. 2:16 – An overview of Millrock’s partners which include both major mining companies and smaller miners. 5:10 – Greg explains why Millrock has chosen Alaska as our home base to explore. 5:52 – Overview of our current active projects in Alaska including an overview of the Tintina Gold Province. 7:28 – Greg provides a history of the Fairbanks Gold District and explains Millrock’s current projects in the district including Treasure Creek, Ester Dome, and 64North. 13:50 – Greg provides a high-level overview of all the upcoming catalysts Milrock has including work in Sonora state, Mexico. 15:10 – Greg answers questions from the audience.
It’s a great presentation, so please take a listen below.
Take care and enjoy the day.
Best regards,
Melanee Henderson, Manager of Investor Relations Millrock Resources Inc. | MRO.V | MLRKF.OTCQB Toll-Free: 877-217-8978 | Local: 604-638-3164
Please find the below link to David Cole’s presentation at the 2021 Gold Forum Americas in Colorado Springs, Colorado, USA. This presentation provides investors with a number of fresh insights into recent material developments in the Company.
joining us for a conversation is Judson Culter the CEO of Rover Metals (TSX.V: ROVR | OTCQB: ROMVF). It’s a pleasure to be speaking with you today as Rover Metals has some important updates for shareholders regarding two active exploration programs in the Northwest Territories. Before we begin, Mr. Culter please introduce us to Rover Metals and the opportunity the company presents to the market.
Judson Culter:
Rover Metals is a publicly-traded gold company. We are focused on Northern Canada making a large-scale discovery of high-grade gold. We operate at the 60th parallel in northern Canada.
Maurice Jackson:
Mr. Culter, take us to the northwest territories where Rover Metals has just completed the drilling component of phase two on the flagship cabin gold project along the Bugow Iron Formation. Sir, please remind us of the value proposition before it’s on the Cabin Gold Project.
Judson Culter:
The value proposition real-time at the time of this interview is an opportunity to buy in the open market and we are weeks away from bringing the drilling results from this summer to the Market. We spent $1.5 Mil CAD for over 30 drill holes across the Bugow Iron Formation. We believe based on what we’ve seen in the field and the core that our geologists logged in the field from the drill core, that we’re likely to have another discovery zone.
Maurice Jackson:
I reference that the drilling component is completed but there’s more work still being conducted on phase two. What else do you have going on there?
Judson Culter:
We have an experienced team of field geologists that are actively working on what we’ve eyeballed as two new discovery zones. In addition to you know what we already know in the Arrow Zone, which was our discovery last year. Therefore, we are planning for drilling at depth, which was one of our prime objectives going into the drilling planned in Q1 of 2022. All of our known surface zones at depth are setting the stage for delineating deep drilling in January along with a ground IP study, which we conducted at the end of August where we believe we got a great bang for the buck on exploration was incredible. We conducted a test run of a known mineralized zone with the IP work the end of August. And the preliminary results came back and it not only told us areas along the Bugow Iron Formation, which are sulfide versus non-sulfide.
Important to note, sulfide of course is what’s directly associated with high-grade gold in our project. The Induced Polarization (IP) work has also provides an insight on how to identify low versus high sulfide, which is valuable. Because it gives us a true depth reading below surface of approximately 75 meters. Also phase two along with drilling included airborne lidar imagery provide us the visuals to cancel out the trees, water, and the mud to allow us to see structurally see the rocks. So, combining the lidar data with the drill data and gives us better understanding on things such as faulting, which happens close to surface, and we have to be able to follow the fault down depth to chase the high-grade gold. Again, the IP which is showing us below surface to 75 meters true depth where the high-sulfide is located. The confidence going into our phase three drill program in January is going to be extremely high and we believe that we may have two additional new zones, in addition to the Arrow Zone, and we’re going to be follow along at depth. These iron formation are underground mines and is setting the stage for our next program.
Maurice Jackson
Leaving the Cabin Lake Gold Project, let’s visit the Up Town Gold Project where Rover metals retains a 25 ownership interest today Rover metals announced that it has commenced on phase two of exploration. Mr. Culter briefly acquaint us with the Up Town Gold Project. The Up Town Gold Project is just on the outer city limits of Yellowknife in the Northwest Territories. The Uptown Gold Project is right next door to the historical Giant Mine. One could literally throw a rock from the Giant Mine head frame and hit the property. Bearing in mind that the Giant Mine produced multi-millions of ounces of high- grade gold. We are excited because the Up Town Gold Project is going to see drilling starting in two weeks. And it’s going to a target that’s been overlooked since the 1960’s. We believe there is a lot of potential in the northeast quadrant of the property that borders right up against Gold Terra’s claims which now has a 1.3 million ounce gold resource. So we’re in a sweet spot, one of their best drill targets is just north of where we’re going to be drilling. The green stone belt runs through the city of Yellowknife. And, Newmont on the southern side of the city has optioned off some claims to Gold Terra. It’s exciting because there’s a lot of renewed interest and multiple companies active in this area. Our partners are moving forward with the drill program and for them to have success benefits Rover as well because we retain 25%, but we also have a framework for a merger.
Maurice Jackson
Mr. Culter, please provide us with the capital structure for Rover metals.
Judson Culter:
Rover Metals has approximately 100 million shares outstanding. We have a million-plus dollars in the bank right now reflective of that cap structure plus, 100% ownership of three projects plus the 25% ownership in Up Town.
Maurice Jackson
In closing sir what would you like to say to shareholders?
Judson Culter:
I think now is a good time identify some good buying opportunities now that summer is drawing to a close and the kids are back in school, and double down on some investments such as Rover Metals that are near term on releasing results to the market. We do expect to have good results in the coming weeks. Therefore, I feel that this may be a great time for speculators to check back in and follow us and hold on for the ride.
Maurice Jackson:
Judson for readers that want to learn more about Rover Metals, please share the contact details.
Judson Culter:
Please visit our website. By the way, we’ve just rebranded new website check us out at www.rovermetals.com.
Maurice Jackson:
Mr. Culter always a pleasure to speak with you, wishing you and Rover metals the absolute best sir.
And as a reminder, I am a licensed representative to buy and sell precious metals through Miles Franklin Precious Metals Investments, where we have several options to expand your precious metals portfolio, from physical delivery of gold, silver, platinum, palladium, and rhodium, to offshore depositories, and precious metals IRA’s. Give me a call at 855.505.1900 or you may email: Maurice@MilesFranklin.com. Finally, please subscribe to www.provenandprobable.com, where we provide: Mining Insights and Bullion Sales, subscription is free.
Joining us for conversation is Kyle Floyd, the CEO and Chairman of Vox Royalty(TSX.V: VOX | OTCQX: VOXCF). Sir, it’s a pleasure to speak with you today, as we deep dive into the value proposition of Vox Royalty, which offers a smart way to invest in commodities. Before we begin, Mr. Floyd, please introduce us to Vox Royalty and the opportunity the company presents to shareholders.
Kyle Floyd:
Vox Royalty Corp has been around since 2014. Our business model focuses on buying third-party royalties, which we believe is the most value-enhancing way to play the commodity sector. And so, we have built what is the fastest-growing royalty company on the planet. We also believe one of the royalty companies trading at the most attractive valuations, and we have a management team and business entirely engaged and finding deep value by buying these third-party royalties all around the world. And we’ve been very, very successful in building Vox Royalty for our investors over the last eight years.
Maurice Jackson:
Before we take a step forward, let’s take a step back. What are some of the merits of royalty companies for shareholders?
Kyle Floyd:
Well, royalty companies offer a better risk-adjusted way to play commodity exposure. And there are a couple of key reasons for that. Royalties typically are revenue interests essentially that run with the mining assets. And so you take a top-line percentage interest in these projects. You’re not exposed to a lot of the costs and the risks that these mining companies face, which can be quite significant. If there’s a cost overrun, the royalty company gets to continue to generate its revenue from the project without having to fund any of the projects or being diluted. If that underlying entity needs to raise capital.
The other costs that the mining that the roads and conveys are not associated with the mining companies face are the general input costs, the variable cost structure, whether it’s for fuel people, you name it, all the inputs that go into mining companies, all those costs are increasing and royalty companies are exposed to that.
The other benefit, then, on the upside is there’s a lot of diversification you get from royalty companies. Vox Royalty has 5 production stage assets going to 10 production stage assets and beyond means that we’re diversified across a suite of assets. And so we don’t have single asset risks that you have in a lot of mining companies. So a lot less risk, but a lot of the same upside, if not better upside that you realize in mining companies in the form of metal prices going up helps increase the value of royalty companies, increase in production, increases in reserves, increasing resources. All of that goes to fuel royalty company growth. And we’re not on the hook for any of those costs in terms of building out those assets further. So that’s a quick synopsis on why we’re so bullish on royalties and we believe that’s backed up in the market as well to companies that outperform for the better part of the last two decades.
Maurice Jackson:
One of the virtues of royalty companies, several embedded optionality. And speaking of royalties, to truly appreciate the value proposition of Vox Royalty, Mr. Floyd, what is a royalty juxtaposed to a stream? We hear those terms often, but they get co-mingled, but they’re not the same.
Kyle Floyd:
That’s a great question. Royalties are these third-party interests. So, interest not held by the operating party of the mining company, they’re the prospector or the junior mining company or the family that owned a ranch that sold the asset eventually to the mining company and typically retained a royalty, which was that right in the upside of revenue generated for these mines typically for the life of those mines. A stream is a structure where you’re typically financing a mining company, and the counterparty is the mining company. You’re giving them capital and in return, you are taking a percentage of a certain metal that’s generated from that opportunity.
And you’re continuing to remit payments to get that metal over the life or over the term of that commercial arrangement. The big difference is typically on streams. You’re giving money to a mining company, so you need them to meet capital versus our royalty model. We’re not giving money to the mining company. We’re purchasing a right held by a third party. And typically those are non-core assets for these groups. Therefore, we’re not restricted by mining companies needing capital to find really interesting deals for our investors.
Maurice Jackson:
Now that we have a better understanding of the merits of royalty companies, Mr. Floyd, what differentiates Vox Royalty?
Kyle Floyd:
There are a few things that differentiate Vox Royalty and we built a business model to be differentiated, to offer better risk-adjusted exposure for investors. And one of the key differentiators is we focus exclusively on buying third-party royalties. We don’t compete at the big end of town trying to finance multi-billion dollar projects with streams. Our niche is finding third-party royalties all over the globe. We have a database that has 8,000 proprietary royalties that provide us a roadmap for finding great royalties in jurisdictions that range from West Africa to Australia, to North America, to South America. And we use a technical team made up of mining engineers and geologists that help screen for good projects that have these amazing royalties over them. And then we connect with these owners of these projects, with our deal sourcing agents all around the world to be able to transact on these opportunities.
Vox Royalty built this ecosystem, this business model around finding third-party royalties, where we think the best value is generated. And if you look at the historical returns of the Franco’s and the Royals, that’s where they’ve generated the best returns, buying these third party royalties, much less the streams and the financing of mining companies that have been completed over the last decade. That being said, they performed very, very well overall. And so that is our business model. Third-party royalties finding amazing assets with great royalties over them, all around the world. And those three kind of key pillars of that stool, the deal sourcing agent network that I think goes farther than probably anybody in our range, the technical team, and intellectual property in the form of a database. And all those combined to make us what has been the fastest-growing royalty company. And I believe also at the best value over the last three years.
Maurice Jackson:
Speaking of the database, Vox Royalty owns one of the world’s largest proprietary royalty databases, consisting of over 8,000, most of which are located in Australia, Canada, and the USA. Mr. Floyd, please introduce us to Vox Royalties property bank.
Kyle Floyd:
It’s a very exciting asset for us, and it’s a huge competitive advantage. Our database has been built over the better part of the last 10 years. Vox was building our database and building our intellectual property. But one of the things that we were acutely aware of is there was the potential that someone was farther ahead of us in terms of this effort to build out proprietary advantages in finding third-party royalties. And sure enough, there was a company that was farther ahead, and that was a company called Mineral Royalties Online.
So they had, at that time, it was a database of 7,000 third-party royalties in their database, all around the world. They had built this database bottoms-up through first principles and first-party data. They went into different mining ministries and exploration offices all around the world and made deals to essentially get this hard copy data and then translate that into data that was online. And so we purchased that database in 2019, that has underpinned a lot of our success and our growth rate. And so that database gives us an edge all around the globe in terms of finding these third-party royalties and being able to transact and closes and bring those into the portfolio.
Maurice Jackson:
I see that Vox has undertaken a keen interest in Australia. Why Australia?
Kyle Floyd:
Well, there’s not just one reason for Australia. There’s a lot of reasons for us in Australia. Australia is, and we’re slightly biased, but it’s also backed up by a lot of the third-party rating agencies, is one of the best, if not the best, mining jurisdictions on the planet. According to the Fraser Institute, Western Australia, which is home to most of our royalties, is the best mining jurisdiction. Investors understand the value of Nevada royalties because Australia is a better mining jurisdiction, in our opinion. We believe Australia is the place that you want to have significant exposure to, complimented by our IP, which has a very strong basis in Australian royalties, and technical team, three of our four key Business Development Executives are also Australian citizens. We understand what we believe is the best major mining market, as well as anybody, if not better than anybody else.
We’ve accumulated what is now the second-largest holding of hard rock mining royalties in Australia. And that’s significant because Australia, beyond just being a fundamentally great jurisdiction with great golden endowments, it has had a very buoyant gold price in Aussie dollar terms. It’s been trading at almost all-time high prices in Aussie dollars for the last almost four years. And so what’s happened is a lot of the exploration development projects that we forecasted would do well have exceeded expectations because the buoyant equity markets have allowed these companies to raise as much capital as needed to advance these projects. And so it’s been a huge boon to our business in terms of the growth of assets already in the portfolio, and having them grow ahead of expectations and realizing tremendous value for our investors. And so, us picking Australia as a place to focus on has paid off for our shareholders.
Maurice Jackson:
Sounds quite intriguing. Now within the property bank, Vox Royalty has producing assets and a pipeline of growth assets. Sir, please acquaint us with your top three key producing assets beginning in Australia.
Kyle Floyd:
This year we acquired the Janet Ivy, and we were engaged on it before it goes back into production. It’s now in production, but it has a huge expansion plan ahead of it, which we expect to take place late next year and that’ll make it a very, very significant cash flow for us. We also have the Koolyanobbing Royalty, which we bought from a telecom business, If you can believe that. It was held in one of their subsidiaries for a very long time, and we’re engaged on a pre at going into production.
That’s had a huge run and huge growth, obviously with the iron ore up in prices. And then we also have a host of other royalties that are in production, Coure Resources, Higginsville operations. We have three open-pits that feed that mill. And so that’s been running at a record pace for us. And then one that we’re excited about is the Segiolola Project that we bought pre-production. It is the highest-grade open-pit gold project in West Africa, and they just announced the first gold pour. So we expect to see revenue from that asset in Q4. So really a tremendous amount of growth in our portfolio from producing and production stage assets.
Maurice Jackson:
We’ve covered the key producing assets. Sir, please introduce us to the growth assets of your property bank.
Kyle Floyd:
I could go on for days about our growth assets. I’ve got to work hard to kind of narrow it down for the readers. I’ll name a couple that I’m excited about. The Ashburton is one. When we bought that royalty, which was in the portfolio of Northern Star. It was a little bit sleepy, but we saw a huge potential in the asset. And what we believed would eventually happen was that other Northern Star would start upping the development curve on this and the timeline on it, or it would transact to a more nimble junior. And sure enough, that happened just a few months after the acquisition of this royalty. The Ashburton is a 1.65 million-ounce gold resource in Western Australia. It’s owned by Calamos Resources now. They’ve got 12,000 meters of drilling going on and their target is three plus million ounces for this asset. So that’s a really exciting NSR royalty for us.
The other one that I’m excited about is The Bowdens Project, which is the largest developing primary silver project in all of Australia. It’s got great fundamentals. The Bowdens Project is an open-pit that’s now exploring the very strong potential to go underground either after the open-pit is exhausted or contemporaneous with open-pit mining. And that is a royalty that has a very multi-decade mine life potential. So those are a couple of the key development stage assets that we’re excited about.
We also have a host of royalties that are going to be coming into production in the very near term. The Pitombeiras is a Vanadium Project in Brazil that they are expecting to come into production in the first half of next year. The Bulong Gold Project is a development stage, production stage asset that’s expected to go into production in mid, next year, over Western Australia Gold Project. And then there’s many more that we can get into without belaboring the point that we have a tremendous amount of growth assets. We have 20 plus development-stage assets, many of which are aggressively moving forward. So it’s a fantastic portfolio of assets with real growth in front of it that’s being delivered to the market every quarter. And that’s increasing value for shareholders.
Maurice Jackson:
Realizing this is a forward-looking statement. We’re going to get into some members later in this discussion, but how much revenue potential is before us under the current market conditions, if we combine the producing and the growth assets?
Kyle Floyd:
And it’s very much a forward-looking statement. I would caution on that. We’ve done a fantastic job of finding royalties 3 to 24 months out before production, where we find the really good value we’re able to bring in those assets that are good fits within our portfolio. We take away the risk from the disparate holders of these third-party royalties all around the world on their non-core assets. So there’s risk asymmetry. They fit better in our portfolio. They don’t fit as one-off assets. And so we’re able to find really good value all around the world, finding these near-production assets. We came out and I think we’ve validated that business over the last 12, 18 months. We recently doubled revenue guidance. We’ll probably talk about that more, but that’s really on the basis that we’re finding these royalties pre-production and then allowing them the time. And usually, it’s not a very long time to go to get into production.
And so when we step out and look at our portfolio, I believe that there’s $15 to $20 million of long-life revenue potential in the portfolios. There’s reason for tremendous upside on that number as well. And that there are 15, 20 exploration stage assets. Some that are generating bonanza grade drill hits are increasing the possibility that those are going to become mines. So very active exploration projects that would kind of fuel growth on top of that. But I believe it’s one of the most undervalued royalty portfolios out there as very strong potential to generate that type of cash flow over the medium and long term. But again, I caution that it was a forward-looking statement. Those are numbers based on operator guidance. They’re based on the technical engineering studies that, that coincide with these assets. But we feel very good about the revenue-generating capability of this portfolio.
Maurice Jackson:
Now germane to revenue, how do mergers and acquisitions impact your portfolio?
Kyle Floyd:
Vox Royalty has a very disciplined approach to acquisitions. We have not the best of our knowledge have not won a single royalty in a sales process. Most royalty companies, in fact, almost all royalty companies, have been growing their business by winning sales processes. So that’s royalties that are being shopped by investment banks and they’re paying top dollar pretty much in every scenario to bring those royalties in the portfolio. What we do is we’ve built a business around finding, these third-party royalties, and disparate shareholders all around the world where these are non-core assets. And so we’ve been able to transact it a really good value. We’re very disciplined on what good value looks like. It has to be accretive across kind of three different key metrics: absolute return on investment basis, relative net asset value, and relative cash flow multiples. Most royalty companies cannot stack up to what Vox is accomplishing in terms of acquisition that’s bringing in across those three metrics. Usually, one, if not two, if not all, three of those metrics break down when other royalty companies are purchasing third-party royalties like we are.
Maurice Jackson:
Now, before we leave the property bank. The multilayered question, what is the next unanswered question for Vox Royalty? When can we expect a response and what will determine success?
Kyle Floyd:
Well, the next step for Vox is we continue to invest in our loyalty database. We will continue to build on that competitive advantage. It’s fueled a lot of our growth and given us a huge leg up on the competition. So we continue to invest in that asset for us, we continue to expand our relationships around the globe. We are finding interesting royalties from Australia to South America, to West Africa and everywhere, pretty much in between. And so, from Vox and what you’ll continue to see on us is expanding on that competitive advantage, expanding on the capability to find really good value for our investors on really exciting projects, where our mining engineers and our geologists understand the quality of those assets so that your readers and the generalist audience out there does not have to do that work. And I think that’s a big advantage that we present for investors is this competitive advantage, that’s good to find a good value.
Maurice Jackson:
Leaving the property bank. Let’s discuss the people responsible for increasing shareholder value. Mr. Floyd, please introduce us to your management team.
Kyle Floyd:
I’m excited about our management team, we’ve handpicked and recruited the management team that we have to fill the roles that we believe needed to be filled over the years to create shareholder value. I founded the concept back in 2013, 2014, and with the belief that we needed to have competitive advantages and skillsets that increase shareholder value and the capability to do so. And so, a few of our key management team members, Spencer Cole is our Chief Investment Officer with a background as a mining engineer, previously worked at South 32 and BHP, and BHP is where the Mineral Royalties Online business, the inspiration was found. Riaan Esterhuizen, who is one of our Executive Vice-Presidents out of Australia. Riaan’s a geologist, Riaan’s led some of the most interesting grassroots exploration campaigns for the who’s who of majors. They went about building Mineral Royalties Online. They built that business. They came into Vox and we acquired that business. And that’s been a huge part of our success. Simon Cooper has been with us for a very long time. Simon’s a mining engineer, a geologist, entrepreneurial, and brings a significant amount of technical capability. He’s worked with some of the most interesting projects all around the world, but also has a very good skill set in terms of finding acquisitions to bring in those acquisitions into our portfolio. And then we have a great CFO in Pascal Attard, and a great General Counsel in Adrian Cochrane. So we believe that we’ve built one of the most exciting and capable management teams in the small-cap royalty space. And it’s a huge asset for our business and our investors.
Maurice Jackson:
And here’s an opportunity to brag on yourself, who is Kyle Floyd, and what makes him qualified for the task at hand?
Kyle Floyd:
It’s always hard to talk about yourself. I’m supposed to be talking about others. But just a little bit about my background. I ran the Mining Investment Banking Division for a firm called Roth Capital. And the inspiration to build Vox was around helping mining companies raise capital, but then seeing that capital not get deployed in the right means and the right ways. And at the end of the day, not generating great risk-adjusted results for investors. And so I’d advise multiple companies on selling streams and royalties and acquiring streams and royalties.
And I believe that was the best business model for the generalist investor to get exposure to commodities. And I went about building a business model for investors, by investors? We started with a seven and a half million dollar investment and began building this company around generating better risk-adjusted returns in the commodity sector. And we’ve been very successful at doing so. And so that’s a little bit of my background. I graduated in Finance from the University of Washington, then a stint at Colorado School of Mines in the Mineral and Energy Economics Department, but a business built around achieving great risk-adjusted returns for our investors.
Maurice Jackson:
Switching gears, let’s look at some numbers, Mr. Floyd, please provide the capital structure for Vox Royalty.
Kyle Floyd:
Vox Royalty has a tight share structure of 39 million shares issued. We, when we went public in May of last year, we had to forward split the stock, which I would tell you, is almost an anomaly in the resource sector. We have 5 million warrants outstanding, at this stage they have a strike at $4.50, which is out of the money as we speak today, and no debt and a very, very strong working capital position. Vox is very well-financed. We have a tight capital structure. We have no intentions of going back to the equity markets anytime soon, and we will continue to be able to build our asset portfolio combination of debt and strategic acquisitions and minimize dilution in doing so. So I’m excited about where our capital structure is today for investors. I think it’s a very unique opportunity from that perspective,
Maurice Jackson:
Who are some of the major shareholders?
Kyle Floyd:
We’ve done a pretty good job of cultivating a nice institutional shareholder base. Management owns 15%. The founding investors own another 15% to 30%. And then we’ve got a nice institutional shareholder roster made up of Konwave, US Global, Adrian day, EuroPacific Gold Fund, and many others that have taken positions in us over the last year and a half.
Maurice Jackson:
In closing. Mr. Floyd, for current and prospective shareholders, why Vox and why now?
Kyle Floyd:
Vox, I believe is a tremendous opportunity emboldened by the fact that we are trading at the very low end, the relative valuation spectrum versus our peers. If you look at some of our closest comps, I’ll refrain from naming them, but they’re trading at multiples of our relative valuation. Yet we’re growing faster, we’re growing at a better value. We’re growing with better fundamentals. And we have competitive advantages that a lot of the industry wishes that they had. And so I believe we’re a tremendous growth opportunity. There is a lot lower risk given our lower relative multiple. So the risk of return upside, I think is there. We’re very optimistic about what we’re going to be achieving for investors over the immediate future and the long term. You have a management team that’s committed to the success of this business owning 15% combined. We look at this as solely an opportunity to create long-term shareholder wealth. And I think our business model is achieving that for our shareholders every day.
Maurice Jackson:
Last question. What did I forget to ask?
Kyle Floyd:
I think we’ve covered just about everything, and it’s really about finding the best risk-adjusted way to play commodities. That’s why we’re here. I believe we’re offering that for investors. We’ve continued to demonstrate that with our recent quarterly results and investors expect more of that as we continue to progress and build this business. And what I believe is realized a re-rating for our shareholders. And even if we don’t, we’re going to continue realizing and create value for our shareholders, and it should also be reflected in the share price and our share value at the end of the day.
Maurice Jackson:
Mr. Floyd, for someone that wants to learn more about Vox Royalty, please share the contact details.
Kyle Floyd:
Absolutely. Voxroyalty.com. We’re on all the social media channels as well. We are happy to engage. There’s also, IR@voxroyalty.com. Please, feel free to be in touch. We love engaging with our investors, and we’ll be happy to share more information.
Maurice Jackson:
Mr. Floyd, it’s been a pleasure to speak with you. Wishing you and Fox Royalty the absolute best sir.
And as a reminder, I am a licensed representative to buy and sell precious metals through Miles Franklin Precious Metals Investments, where we have several options to expand your precious metals portfolio, from physical delivery of gold, silver, platinum, palladium, and rhodium, to offshore depositories, and precious metals IRA’s. Give me a call at 855.505.1900 or you may email: Maurice@MilesFranklin.com. Finally, please subscribe to www.provenandprobable.com, where we provide: Mining Insights and Bullion Sales, subscription is free.
Joining us for conversation is Morgan Lekstrom, the president of Lakewood Exploration (CSE: LWD | OTC: LWDEF). Glad to have you join us today, as Lakewood Exploration has been busy on several fronts in its resolve to become the next pure silver play in the United States. Sir, I understand you have several updates for us regarding the release of the 43-101 on the flagship Silver Strand, along with exploration successes, portfolio expansion, and pending catalysts. Before we begin, Mr. Lekstrom, please introduce us to Lakewood Exploration and the opportunity the company presents to shareholders.
Morgan Lekstrom:
Lakewood Exploration was listed on the stock exchange, the Canadian securities exchange four months ago. We’re a newly formed silver company with what we call a triple-pronged approach, where we look to have a large exploration payoff, near-term production potential, and meaningful acquisitions. We have three assets in the United States, one in Idaho in the prolific Silver Valley, two in Nevada, in the Silver Alley, which are all high-grade, past-producing mines. We have a very tightly held share structure with just under 50 million shares out and only 37.6 of them on the market right now. A lot of room to grow as a company and large exploration payoff for shareholders.
Maurice:
Mr. Lekstrom, let’s get right to it. Take us to Idaho, to the flagship Silver Strand, where Lakewood exploration has a pending NI 43-101. Lakewood has just provided the market with some important updates. What can you share with us?
Morgan Lekstrom:
Lakewood Exploration is very exciting about Silver Strand. We just finished the 43-101 and in the filing process, and we are looking forward to moving into exploration. Our plans right now are being enacted. We’re actively in our existing underground. It was always called a historic underground, but we’re actively in there. Finished rehabilitation and now we’re moving into mining the Silver Strand for creating an exploration cutting. We’re looking to get in there, drove right from the underground and from surface. Still planning and drilling to 2,700 meters. That in conjunction with the 43-101, in conjunction with what we’re looking at for our drill program and our surface programs, it’s leading for pretty exciting times at Silver Strand.
Maurice:
Speaking of that drill program, you’re going underground and near-surface. Talk to us about the method first. Are you going underground first or near-surface?
Morgan Lekstrom:
We’re working on getting into our underground. We have a mining crew in there right now creating that new drill bay, a more strategic drill location for hitting the ore body at deeper depths and at better angles. We’re looking at mobilizing that drill crew in there in September, by the end of the summer, and just waiting and looking at strategic targets for the surface program as well.
Maurice:
Now, I realized the labs are backed up and you’re just beginning. But do you have any anticipation of when the market may receive the next set of assay results?
Morgan Lekstrom:
I think you’ll be pleasantly surprised.
Maurice:
We’ll read into that one just as it is, sir.
Morgan Lekstrom:
Exactly.
Maurice:
All right. Leaving Idaho, let’s visit Nevada, where Lakewood Exploration is looking to further extend its footprint in two project acquisitions. Sir, what can you share with us?
Morgan Lekstrom:
Lakewood Explration is working on two transformative acquisitions which are the Eliza Silver Project and the Silverton Mine. I think we’ve touched on them before, Maurice, around Eliza and Silverton, Eliza being that prolific Hamilton historic area, 1860-1870 mine, 40 million ounces out of the area. Very high-grade. One of the mines on our claim block had 5,600 to 18,500 thousand grams per tonne silver, mineralization across surface, had no modern exploration done. We’re coming up with exploration plans there right now.
Lakewood has hired a separate geologist for this work so that we’re keeping focused on all three assets in the right way. Silverton being up in Nevada as well. These are all in that Tonopah to Ely area. A lot of prolific mine around there. Round Mountain is one of them. The Silverton mine itself exhibits the same infrared ASTER signatures as Round Mountain. We have some very good geology work that was preliminarily done to the transaction, as well as this is a past-producing silver mine of 933 grams a ton in the 1930s. Again, similar geology to Eliza. There’s an ability there to utilize the exploration techniques, as well as having a large exploration payoff between the two for our shareholders.
Maurice:
It sounds like a lot of blue sky potential there, sir. When will the transaction become finalized?
Morgan Lekstrom:
We’re looking at doing that most likely this week.
Maurice:
Talking about full speed ahead.
Morgan Lekstrom:
We are. Like I said four months ago, where we were to where we are now, it’s pretty transformative.
Maurice:
Now, once the transaction has been consummated, how will you leverage the intellectual capital that is onsite for both projects?
Morgan Lekstrom:
I’m glad you brought that up. I’m heading down to Nevada with the gentlemen that we transacted with Dave Forest, and we’re going to be putting in our boots on the ground with a geologist that we just hired. We’re going to get that tribal knowledge transfer right away. We’re going to make sure we have a concrete plan. I have that geologist already starting.
He’s already heading down there right now to put boots on the ground and get his feet wet down there, or as they say in Nevada, keep your feet dry, and come up with that methodical plan, utilizing that knowledge in the background. We want to make sure that when we are coming up with drill targets, that they’re utilizing these old existing mines. There’s uniform mineralization in that old California mine. We’re able to see maybe a little more info than what just a standard exploration project allows us.
Maurice:
Now, before we leave the property bank, multilayered question, what is the next unanswered question for Lakewood Exploration? When can we expect a response, and what will determine success?
Morgan Lekstrom:
The real catalyst will be getting underground at Silver Strand and getting modern exploration going on Eliza and Silverton. We’re well on our way to doing both. I need to highlight that four months ago, we vended in Silver Strand and we were able to take that from having almost a very bare-bones plan to re-opening our underground, starting to blast as of today, and putting an underground drill program and a surface program together within four months is pretty impressive for the team. A true demonstration of our geological and business acumen.
Maurice:
Switching gears, let’s look at some numbers. Sir, please provide us the capital structure for Lakewood Exploration.
Morgan Lekstrom:
With vending in Eliza and Silverton, we’re at 37.4 million shares outstanding. We have 2.7 million options, 7.8 million warrants, and then fully diluted sets us right around 44.9 million shares. Tightly held about. 42% insider held right now. A lot of room to grow. As we grow these assets, as we grow our share structure, there’s a lot of value to be seen there for shareholders.
Maurice:
Before we close, Mr. Lekstrom, what would you like to say to shareholders?
Morgan Lekstrom:
Stay tuned. We feel there are some real exciting times are happening in silver space and Lakewood Exploration portfolio expansion with key assets in two of most prolific silver states and silver places to mine in the world, in Nevada and Idaho is exciting. We are looking forward to getting the results out as we get them, but also coming up with these plans for Nevada. Stay tuned to what we’re doing.
Maurice:
Last question, what did I forget to ask?
Morgan Lekstrom:
I think you covered it.
Maurice:
Mr. Lekstrom, for someone that wants to learn more about Lakewood Exploration, please share the contact details.
Mr. Lekstrom, it’s been a pleasure to speak with you. Wishing you and Lakewood Exploration the absolute best, sir.
And as a reminder, I am a licensed representative to buy and sell precious metals through Miles Franklin Precious Metals Investments, where we have several options to expand your precious metals portfolio, from physical delivery of gold, silver, platinum, palladium, and rhodium, to offshore depositories, and precious metals IRA’s. Give me a call at 855.505.1900 or you may email: Maurice@MilesFranklin.com. Finally, please subscribe to www.provenandprobable.com, where we provide: Mining Insights and Bullion Sales, subscription is free.
Lakewood Exploration is focused on building a multi mine silver production company. Its growing asset portfolio includes the recently acquired past-producing Silver Strand and Burnt Cabin mines located in the renowned Coeur d’Alene mining district in Idaho, USA, one of the most prolific silver districts in the world and the earlier stage Lacy Gold-Silver project in British Columbia, Canada.
The Silver Strand Project
The Silver Strand Mine has a 5.5km strike length in the Coeur d’ Alene mining district in Idaho.
Located in North Idaho’s Silver Valley along Interstate 90.
The district is known for its depth potential with numerous deposits and has produced over 1.2 billion ounces of silver.
Lakewood Exploration is partner and we are shareholders.
Joining us for a conversation is Michael Rowley, the CEO of Group Ten Metals. Glad to be speaking with you today, as you have a big announcement for shareholders regarding the Black Lake–Drayton gold project. Before we begin, Mr. Rowley, please introduce us to Group Ten Metals and the opportunity the company presents to shareholders.
Michael Rowley:
Group Ten is focused on advancing our Stillwater West project as a premier source of low-carbon ‘green metals’ in Montana’s Stillwater district, beside Sibanye-Stillwater’s mine complex. Within the next few weeks, we expect to debut our maiden resource estimates of nickel, copper, palladium, platinum, rhodium, gold and cobalt, on that project which we expect will compare favorably with our peers and position us for growth based on this years drill campaign.
Along with owning half of the iconic Stillwater district in Montana, Group Ten also has two other district-scale land positions, the Black Lake Drayton gold project in Ontario that you mentioned a minute ago, and the Kluane PGE-Ni-Cu-Co project in the Yukon. All three of these are big brownfield land positions in great districts, and they are 100% owned by Group Ten because we were acquiring them strategically during the bear market when great assets were available inexpensively. We are focused more than ever on Stillwater, and with that our non-core assets are effectively up for sale or spin-out in the first in a series in that regard.
Maurice:
Well, let’s begin today in Ontario is Group Ten Metals has just announced (Press Release) a letter of intent with Heritage Mining on the sale of the Black Lake–Drayton gold project. Congratulations, sir.
Michael Rowley:
Thank you, we are excited about the potential we see there. Heritage Mining is a new listing with an excellent team, and they are well equipped to focus on Black Lake and give it the attention it deserves while granting excellent exposure to that success.
Black Lake is a rare asset that is hard to find in this current, improving market with increasing activity in junior exploration. It checks all the boxes. It is a big land position that shares an emerging district with a 3Moz development-stage high-grade gold project, yet is underexplored. So there is lots of smoke, someone just needs to find the fire. Treasury Metals has done great work to the west of us consolidating the rest of the district, and Rainy River, farther to the west is now in production with New Gold. This whole belt was late to the game because of limited access and shallow ground cover, but developments at Rainy River in the 1990s changed that, and now there is over 14Moz in the belt, and growing.
Maurice:
All right, let’s get into the exciting stuff, sir. Please share the terms of the agreement with us and in particular, the cash and share compensation that group 10 metals will be receiving along with the carried interest in the potential for discovery payments.
Michael Rowley:
It’s a great deal for both parties. Group Ten will gain a major share position in a newly listed company that’s focused on precious metals and focused on developing tier one assets, developing resources. And we get that 10% free carried interest through to feasibility study. So we can be at the table at a later stage to negotiate the sale of that during a possible broader consolidation play in the district. We received $320,000 in cash payments in the first two years of the deal as well. And we receive bonus payments of $1 for every ounce of gold that is formerly brought on the books in any category at any time and even in multiple stages. That has a $10 million cap on that, the district already hosts more than 10 million ounces. So that figure is certainly possible given the area.
Maurice:
So that we better appreciate the terms. Would you please provide us with a quick bio on Heritage Mining and what they bring to the table?
Michael Rowley:
Heritage Mining is a very experienced team with an excellent track record of raising cash and advancing projects, especially in Ontario and Quebec. Heritage is familiar with this geology. They’re keen to hit the ground, which is very pleasing to us because the point of this deal is that we want someone else to raise the $5 million and advance this asset the way we think it can be advanced. So they certainly appear to be capable of that. They have an excellent record of proving ounces, developing mines, operating companies, and marketing, raising capital.
Maurice:
Where will this transaction put Group Ten Metals in terms of ownership, percentage on the share structure for Heritage Mining?
Michael Rowley:
Well, we’ll have to see what their first placement looks like once they’re trading and that’s a couple of months out from now. But we expect to be about 10% of the company initially, and then maintain between the 5% and 10% level from there. A key point on that note also is that we have that bonus structure having a carried interest. Therefore, we are not relying solely on our share position for value. We’ve got several avenues here to be exposed to that success that we expect them to have.
Maurice:
And when does Group Ten Metals expect the transaction will close?
Michael Rowley:
We look good to close around the 60-day mark around mid-October.
Maurice:
Leaving Ontario and onto the Yukon where Group Ten Metals has another non-core asset within his property bank that is equally has been receiving a lot of interest from prospective buyers. And I’m speaking of the Kluane PGE, nickel, copper project in the Yukon. Sir, any updates for us?
Michael Rowley:
The Kluane is another explored project. We have over 250 square kilometers in the under-explored Kluane Belt, which is a fantastic belt of deposits. Another ultramafic system like Stillwater reaching from BC through into Alaska. The most advanced one. There is Nickel Creek Platinum, formerly Wellgreen. And the news there is that they’ve been increasingly active in the past year. And that’s good to see. They’ve been drilling, they’ve been doing geophysics and they’ve been doing it up on the northwest end of the system towards us, which is music to our ears. We’ll be seeing them at Beaver Creek and we’re looking forward to further activity from them. You’re correct that we’re getting more interested in those projects and that they like Black Lake are effectively for sale. We just have low carrying costs. Then we’re taking our time looking for the right deals.
Maurice:
Leaving the Yukon less visit Montana, which hosts your flagship Stillwater West project. But before we get into the latest news on the Stillwater West, would you please remind us about the unique value proposition before us on your flagship project?
Michael Rowley:
The Stillwater West is fantastic. In 2017, the opportunity was presented to us to own half of the iconic Stillwater District, which sounds too good to be true in a way. But thanks to several factors that came together at the right time. Most of all, a local vendor who had spotted a bankruptcy that left these claims available, and he was quick, he bought the data from the past operators and he tied up the claims. We’ve since tripled land position. We now own half the district we’ve built a terrific database, predictive geologic model. The point is that we are well on our way to proving ourselves as a primary source of green metals, battery-grade nickel, copper, cobalt, with platinum group elements, palladium, platinum, rhodium, and also gold.
In a US district beside three mines and a smelter complex. These are big disseminated, sulfide deposits. They convert easily and cleanly to nickel sulfate. And we are weeks away from our first resources on the project, which is a very exciting moment for any junior exploration company. This will be a solid debut, it’ll position us nicely among our peers. And we see terrific room to grow from there. If you’ve seen our news release back in April, where we related the 3D models from our IP survey, the emerging images of our Resource models, and the potential we have for expansion.
Maurice:
The Stillwater West is currently undergoing its largest exploration program to date, which is a 10,000-meter drill program there recently added a second drill rig, sir, take us on-site and get us up to speed on the program.
Michael Rowley:
We have 2 rigs turning, which is music to our ears. We’re hitting sulfide very nicely in both, massive sulfide in places, net texture, and disseminated in others. The predictive model that we’ve been working up the past few years is working beautifully. And that’s a key point. We’re now hitting with a high degree of predictability, which is what geologists want to see. The district is well mineralized. Our neighbor has 87 million ounces in current resources, reserves, and 14 million ounces in past production of the highest-grade palladium-platinum in the world.
That’s a single magmatic pulse laid down across 40 kilometers. These things are staggering in scale, and it’s also a nickel-copper-sulfide deposit that is worth noting. We are just below them in that stratigraphy. And we’re seeing similar continuity of these horizons. We are hitting new ones all the time, they seem to run for great lengths and it’s easy to add ounces and pounds. The program that you mentioned that’s underway now should do very nicely for expanding the inaugural resources as fast as we can in 2022. So we’ll debut numbers here in summer 2021, and then look to expand them as fast as possible in 2022.
Maurice:
All right, you have two truth machines drilling away. Do you already have some core in the lab and any timeframe on when we may receive some assays?
Michael Rowley:
The first one and a half holes are in the labs, include some nice-looking core. The labs are saying six weeks though, give me into October to get those into a news release.
Maurice:
Now we will hold you to that, but we will hold the labs to that. All right, switching gears, let’s look at some numbers. Sir, please provide the capital structure for Group Ten Metals.
Michael Rowley:
Group Ten Metals has 163 million shares outstanding at today’s price. That puts us around a $50 million market cap. We feel that significantly below where we could be based on our peers. I think a good peer might be Canada Nickel, for example. Noting of course they don’t have the platinum group element component that we have. However, they are four or five times our market cap with a similar, large, lower-grade nickel project. And we think that makes it a compelling comparison. We have$ 6 million cash in the bank and we have $13 million in the money options and warrants. Those are priced between .21 and .30 cents. No placements are planned for the foreseeable future and a fully funded, fully permitted for this year’s program. And even into next year at this point.
Maurice:
Speaking of those warrants. Expect for me to go ahead and exercise mine. Speaking of the shares, Group Ten Metals recently upgraded its DTC eligibility. What does that mean for shareholders? I
Michael Rowley:
I had to look into it myself to be reminded. DTC is an electronic clearing service. This simplifies the process of trading and enhances liquidity For American traders, which we have a really good US shareholder base. So this is, meaningful in terms of fast and efficient settling of those trades.
Maurice:
Before we close Mr. Rowley, what would you like to say to shareholders?
Michael Rowley:
This is an exciting time for Group Ten Metals! If you’re familiar with the Lassonde Curve value creation in junior miners were at that just pre-discovery phase where you get that rapid increase in value. And it’s quite a privilege to be here. It’s exciting to be systematically exploring the Stillwater Complex, which is famously metal-rich, and yet also under-explored and it’s remarkable, but the 215 drill holes to date across 32 kilometers of claims, 61 square kilometers. That’s not a lot. And we’re testing things all the time that have never been drilled and we’re finding nice-looking sulfides there. So to be the ones systematically adding value and looking like, in terms of the market, that we’re on the left end of the Lassonde Curve, but knowing that we’re much farther along in terms of having comfort about some size and grade here. Pretty exciting.
Maurice:
Last question. What did I forget to ask?
Michael Rowley:
Well, it’s probably a good point to touch on the broader commodity markets and you know metal markets are going sideways at the moment but there are the fundamentals are in place perhaps more than ever for a really good steady increase. We’re looking for all the metals in our suite of commodity baskets to resume their upward momentum likely this fall. We’ve got the FED meeting behind us today. Things look positive the fundamentals are there and we’re looking forward to increased value for all our commodities, especially, in nickel. We’re hearing increasingly of the coming shortfall in nickel sulfide, in particular clean nickel that’s good for batteries or rather makes nickel sulfate in the most environmentally friendly manner. We’re excited to be part of that and we’re looking forward to that renewed momentum. This is a good buying opportunity to buy shares in Group Ten Metals.
Maurice
Sir, for readers that want to get more information on Group Ten Metals, please share the website address.
