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METALLIC MINERALS | Exploring for High-Grade Silver in the Brownfields of the Yukon

FINANCING OPPORTUNTY FOR ACCRECREDITED INVESTORS

Greg Johnson, chairman and CEO of Metallic Minerals, sits down with Maurice Jackson of Proven and Probable to discuss his company’s silver exploration in the Yukon.  This is a 3 part series introduction into the value proposition of the Metallic Group of Companies. Important Note: Enclosed is a Financing Opportunity of Accredited Investors.
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http://www.theaureport.com/article/2018/10/24/exploring-for-high-grade-silver-in-the-brownfields-of-the-yukon.html

Exploring for High-Grade Silver in the Brownfields of the Yukon 
Contributed Opinion

Source: Maurice Jackson for Streetwise Reports  (10/24/18)

Maurice JacksonGreg Johnson, chairman and CEO of Metallic Minerals, sits down with Maurice Jackson of Proven and Probable to discuss his company’s silver exploration in the Yukon.

Maurice Jackson: Joining us today is Greg Johnson, the CEO and chairman of Metallic Minerals Corp. (MMG:TSX.V), which is known for high grade silver in Canada’s Yukon Territory.
Today’s interview will be the first of a three-part series, introducing the value proposition for the Metallic Group of Companies comprising Metallic Minerals, Group 10 Metals and Granite Creek. These are three separate leading exploration companies, each with a different metal of focus, but with a common approach to business under the proven management of the Metallic Group.

Today, we will focus on Metallic Minerals, a leading explorer of high-grade silver in the Yukon Territory. Mr. Johnson, for someone new to the story, who is Metallic Minerals? What is your flagship project? What is the thesis you’re attempting to prove?
Greg Johnson: Metallic Minerals is a leading explorer for high-grade silver, and we are exploring in the Keno Hill silver district of Canada’s Yukon territory. This famous silver district is one of the highest-grade silver producers in the world, producing over 200 million ounces of past production and hosting over 100 million ounces of current resources.
Over the past two years, Metallic Minerals has consolidated the district adjacent to Alexco Resources, and we are undertaking exploration along the extensions of the known productive structures that continue onto our land holdings. We believe that the Keno Hill Silver District has the potential to be a billion plus ounce silver district, and geologically is very similar to the Coeur d’Alene District in Idaho, which has produced over 2 billion ounces of silver from very similar style veins.
Maurice Jackson: Please share where in the Yukon the Keno Silver Project is located and provide us with some historical context.
Greg Johnson: The Keno Silver Project is located in the central part of the Yukon and was discovered after the famous Klondike Gold Rush with dozens of producing mines developed in the district over the years since the 1920s to the present.
Metallic Minerals has consolidated what was previously very patchwork land ownership, with more than 40 different owners in the district. It’s largely now Alexco and ourselves, with eight past-producing, high-grade mines on our holdings, giving us excellent exploration potential.
Exploration of the Keno District over the past few years has seen some major new discoveries including the Bermingham silver deposit by Alexco, which is probably one of the best new silver discoveries in the industry, by grade and quality. It really demonstrates the remaining potential in this proven high-grade district for new discoveries.
Maurice Jackson: Mr. Johnson, we’ve covered some good background on the Keno Silver Project. Walk us through the project.

Greg Johnson: I think a good way to start is by taking a look at a map of the lower part of the Yukon. You can see on this map, the Keno District is right in the middle of the Yukon, located on the highway. There’s grid power on site with a mill operated by Alexco Resources. The Silver Trail highway from the Keno area connects to the Klondike highway leading through the capital, Whitehorse, and down to existing port shipping facilities, in Skagway, Alaska.
All the infrastructure that’s needed to build a mine is already here in the Keno District. This project also sits within the traditional territory of the Nacho Nyak Dun First Nation, who have comprehensive cooperation benefits, agreements in place with both Alexco and some of the other most advanced projects in the region. It’s really an excellent place to be exploring.
If we take a look at a regional map of the district you’ll see the Alexco holdings in the light green and the Metallic Mineral holdings in the golden brown color, that really forms the core part of the Keno Hill Silver District, where these high grade silver veins occur.

Within the region, there are additional players, such as Victoria Gold Corp. (VIT:TSX.V), which is developing a large open-pit mine that’s currently under construction. To the north, Atac Resources, partnered with Barrick Gold on the Rau Trend property, which is adjacent to our Mackay Hill project, another high-grade silver project that we’ll talk about a bit later.
On this map you can more clearly see the road access in the area, with Keno city and the Keno Hill mill in the center of the district. This infrastructure gives accessibility to the entire property and will really facilitate a development of any resources in the future.
Alexco Resources built the current mill in 2010. You’ll see that the average grade is between 840 and 930 grams per tonne for the current mine plan for Keno Hill. This is the highest grade of silver in its class. At 3.5 to 4 million ounces per year, this would make this a top 10 silver producer in terms of silver production levels among listed companies.
<pYou’ll notice that the capex for the new mines is quite low at $27 million dollars, with an exceptional IRR, and that’s because these deposits are quite shallow. These deposits are very high grades, and the relatively low tonnage and near surface depths make for a low capital investment to bring these to production.
If we take a look at grade of the Keno District versus grade of the other primary silver mines in the industry, this chart compares the mine grades of those various projects.
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What you’ll see on the far right are a number of relatively low grade mines, then a large group of mostly underground, medium grade deposits. Then on the far left of the chart it highlights six silver mines that truly stand out in terms of their grade.
Keno Hill, is the second highest total grade, and the highest in terms of silver grade with the new mine plan of any of those deposits. What also stands out in this comparison is that it is located in Canada. It’s one of the few Canadian silver projects and thus among the lowest political risk.
The style of deposit and the style of the veining that we see at Keno occurs as high sulfide, silver, lead, zinc veins. These are structures that form in the key host rocks, such as the Keno Hill quartzite and greenstones. What you can see in this image is underground at the Bellekeno Mine and is fairly typical of the mineralization that you would see in the Keno District.

These are structurally controlled deposits and for exploration it is key to understand where the structures are. This tabular zone shown here would continue towards the surface, and it would continue at depth varying in terms of its overall width. These are very high-grade silver veins and that can run over 5,000 grams per tonne in the in the Keno District.
If we take a look at the geologic map of the entire Keno Hill District from Silver King on the West to Cobalt Hill on the East, it measures about 35 kilometers from end to end. The lines on map represent the 12 known mineralized structural trends and in the orange circles are the past producing mines that occur along those major trends like “pearls on a string.” You can see in yellow the recent new discoveries in the district, which highlights some of the new mines that we expect to see going into production in the near future. The small red circles represent high grade past producers that occur on the Metallic Minerals holdings.

Our lands are dominantly to the East, which is the lesser explored part of the district, but also continue to the South and West and in places internal to the Alexco holdings. We have focused on acquisition of key blocks of ground that have shallow past production and have potential for resource development.
Looking at a cross section across the district from West to East allows us to look at a slice through the geology and to see the regular nature of these deep seated structures that have formed vein deposits in the district.
The red stippled ellipses represent the mineralized zones particularly in the brittle quartzite host rock, which is shown in light purple. The Keno Hill quartzite is an excellent host for these structures to form these Keno type deposits.
It’s believed that underneath the Keno District we had metal rich intrusive bodies that were the source of the fluids that drove these vein deposits. As you move from west to east, you see a general decrease in the amount of exploration and production that we’ve seen in the district. The Bermingham Trend is the most developed with 160 million ounces of past production plus current resources, while the lesser explored adjacent Elsa and the Husky trends have about 35 million ounces each. As we continue to the east, you have the Flame & Moth Deposit, which is a new discovery in the district with about 50 million ounces, and then Bellekeno at about 25 million.
As you progress further east the areas had some shallow historical mining but, as mentioned, were these were mostly held privately and have not generally seen modern exploration. These areas have been subsequently consolidated under Metallic Minerals and have the same style of geology as on the western side of the district where most of the past production was focused. We are now exploring in these less explored areas as part of our Keno Silver Project.
Looking at a long section along the vein on the Bermingham Trend, we get a sense of the types of geologic settings and deposits that form across the district. In the center of this section are the Hector-Calumet Mines, which were the largest producers in the district at over 100 million ounces, of very high grades in excess of a 1,000 grams per tonne silver.

Notably, Alexco recently discovered the Bermingham deposit along this major structural trend, in an area of relatively modest past production just 1 kilometer from the Hector-Calumet mines. That deposit has now grown into some 50 million ounces, it still remains open at depth, and it has the potential to become perhaps even the largest deposit in the district.As an exploration geologist you get quite excited when a deposit of this quality and size is being found right near surface and only a kilometer from the largest producer in the district. This is a strong indication that this is a district that has excellent potential for new discoveries, as we continue to explore a lot on these trends.
As you go to the east from the Hector-Calumet, you get out of the quartzite hosted vein systems and into the greenstone hosted vein systems. This is a second brittle host rock that provides an excellent setting for developing high grade mineralization, and the Sadie Ladue mine is an example of a greenstone hosted Keno deposit.
These styles of deposits are the same styles that Metallic Minerals is looking at in on our ground in the other parts of the district. We have ground that is both east and west of the Bermingham Trend, and we have been prioritizing among various targets to pick the ones that we believe have the best potential to advance the most rapidly towards resource development.
We have three priority categories of targets at Keno that are at different stages of development. The most advanced targets are at the resource delineation stage, where we have high grade mineralization at surface, with trenching and shallow drill holes that indicate we have a mineralized system similar to the setting seen in other parts of the district. We’ve been drilling along those structures to determine the scale and potential of those targets at the Caribou, Homestake and Formo deposits.

We have six other targets where we have high-grade mineralization at surface with trenching and surface sampling, but these have not yet been drill tested. These targets are now refined enough that we’re ready to go in and drill test them as part of our 2019 program. Initially, we’ll probably drill four to six holes on these targets looking to determine whether or not these have potential to become large vein systems, similar to what we see in other parts of the district.
In addition, we’ve got about 20 earlier stage targets, where we are developing and refining our understanding of the system through tools such as a geophysics and soil sampling, trenching and mapping. These will be targets that we’ll be looking to advance to a drill targeting stage. Coming out of this program in 2018, we’re quite excited to be continuing our work, refining the targets that we have drilled and getting these initial step out drill test completed, on some of these already identified target areas.
Maurice Jackson: Mr. Johnson, you’ve demonstrated that Metallic Minerals is exploring for high grade silver in a world class district. Compare and contrast how shallow your deposits are compared to similar districts like the Coeur d’Alene District, Idaho, which was the start of many of the best-known silver miners like Coeur and Hecla.
Greg Johnson: This is an excellent point, Maurice. When we look at the Keno District, as I mentioned it is very comparable in terms of style geologically with Coeur d’Alene, but in the Keno district the deepest mining to date is only to about 300 meters from surface. The deepest drilling is in the new Bermingham discovery at 400 meters of depth.
By contrast, in the Coeur d’Alene District they’ve recently completed a new shaft to 3 kilometers of depth and region has produced over 2 billion ounces of silver. This highlights the potential in the Keno District as we continue to explore a long trend in depth and to really grow this similar style district beyond the 200 million ounces of past production and current 100 million ounces of total resources.
Maurice Jackson: The Keno Silver Project is considered a large brownfields exploration property, for the members of the audience that may not be familiar with the term brownfields. Please explain why this should matter to them.
Greg Johnson: A brownfield exploration property is a term that we use when you’re exploring an area that has had significant past production and discoveries. Many people may not realize that the majority of the exploration dollars that are spent each year in the mining industry actually go into expiration in and around existing mines, because that is one of the best places to make discoveries that can be rapidly developed and produced using the existing infrastructure in the area. The adage in the mining industry is the best place to find a mine is right next to an existing one.
In this case, in the Keno District, we’ve consolidated our landholdings alongside an existing mine operator, Alexco Resources, and we are exploring on those same productive geologic structures. This dramatically increases the probability of exploration success, and for making new discoveries. It also would allow us to utilize existing infrastructure in the district to facilitate rapid development of low capital cost mines.
Maurice Jackson: Metallic Minerals has another silver property in your portfolio, McKay Hill, where is it located from the Keno Hill Project and please provide us with some historical background.
Greg Johnson: The McKay Hill property is an earlier stage property, but it’s an opportunity that we see for another potentially district scale, high grade silver-lead-zinc property similar to Keno. It’s about 50 kilometers to the north up near Atac Resources’ ground; it was historically a high-grade producer back in the 1930s and the 1940s. What our work over the last couple of years has shown is that we’ve got a large number of veins in the area, that these come right to surface, and with the sampling that’s been done to date, we see the opportunity to develop a second project with significant potential here. We completed a work program in parallel to our Keno Silver Program this year on the property, and we’re expecting to be able to release results from that very shortly.

Maurice Jackson: How has the work gone this year at McKay Hill?
Greg Johnson: Well, it’s been an exciting year this year. This is a follow-up year from last year’s program where we did initial sampling in some of the known historical prospects. This year, our work expanded out across the property using geophysics, geochemistry and prospecting. We did work in new areas that hadn’t been previously recognized and expanded the known zones. What was exciting is that we had several new vein discoveries that we uncovered this year and we significant expanded the size of the historical central zone now approximating a kilometer in length and 250 meters in width. It really looks like we’ve got the potential for something that’s coming together as a bulk mineable target, as well as a number of other high-grade vein occurrences on the property that really justify additional work.
The results that we received last year showed similar types of mineralization to Keno with silver equivalent values over 1,000 grams per ton, and sometimes gold values exceeding 10 or more grams per tonne in some select samples. This is again a polymetallic system, it’s silver, lead, zinc, copper and gold. It’s an exciting opportunity earlier stage, and is indicating that this regio shows excellent potential for creating value, as we continue to explore and advance this portfolio projects.

Maurice Jackson: All right sir, now you’re wrapping up exploration for this season at the Keno Silver and McKay Hill Silver Projects. When should we expect to see the next results from this year’s drilling and target development work?
Greg Johnson: Much like last year, we would anticipate being able to release results over the next couple of months, as we receive them. Last year based on putting those numbers out, we saw quite a good response in the market and are encouraged as we continue to advance and highlight the potential on the property. We expect to have a series of news releases ahead for the company, and we look forward to being able to lay out those results and indicate the potential, the number of targets we’ve got and the opportunity going forward on these properties.
Maurice Jackson: Lastly, Metallic Minerals is also building a portfolio of alluvial gold production royalties in the Klondike Gold District. Can you tell us about that?
Greg Johnson: This is a fairly new opportunity for the company. Last year, we had a chance to pick up a large block of ground in the Klondike Gold District, the historical Gold Rush area where alluvial or placer production of gold in gravels was discovered in the 1890s. Since that time, production of gold has continued in the region, with large bucketline dredges through the 1970s, and later open pit mining along the major drainages. To date there’s been about 20 million ounces of gold produced in the region.

The Indian River drainages are now the single largest producer in the Klondike District, producing about half of all the alluvial gold in the Yukon. Metallic Minerals has been able to acquire a large block of land in this area, with the opportunity to be able to invite experienced placer mining operators to option this ground where we receive a 10% to 15% royalty on their production.
We completed two options last year and have already received some initial royalties from test mining in 2017 and 2018. This year we have leased another 6 miles out of 27 miles with exploration activities happening this year on those new leases.
We see this as an opportunity to start to build a production royalty business, that though modest to start with, over time we think can be fairly substantial for the company. It could allow us to build sustainable and cash flow while we continue exploration as one of the leading silver explorers in the Yukon.
In particular, the opportunity on Australia Creek is an interesting one, as this area was not historically mined and it is one of the few areas in the region where land packages of scale are available to be developed. These initial leases have established infrastructure that then allows additional high quality operators to come in to the upper parts of the stream. We are currently in the permitting process on three new operating areas, and we’ll have the potential for another 10 operators here in the next year or two. We are in discussions currently with a number of parties who are interested in acquiring ground in this highly prospective area.

It’s an exciting development for the company, and I think it has the opportunity to provide sustainability and potential cash flow for the company going into the next couple of years.
Maurice Jackson: I am quite impressed with the 10% to 15% production royalty that you’re receiving here. Share with us how are we able to accomplish this?
Greg Johnson: It’s a point that’s worth noting since, in the hard rock mining business royalties are often range from 1% to 3% range, the difference here is that the cost to run an alluvial mine in terms of the equipment and the operating cost and capital is much, much lower.
This means that operators can afford to pay a higher royalty for alluvial production because there’s not as much capital investment and the timeline to permit one of these projects is months as compared to years for hard rock deposits. That allows the opportunity for both higher royalty payouts and a faster pathway to production on these in comparison with a royalty for a hard rock deposit.
Maurice Jackson: This really speaks to the business acumen of Metallic Minerals. What is management’s philosophy? Are you looking to build mines or are you focused on exploration?
Greg Johnson: On the silver side of the business, we’re very much focused on the opportunity to make discoveries and to rapidly advance those to resource definition. We think that this stage is one of the greatest periods for value creation and represents opportunity for investors to benefit by being part of it. It’s not uncommon that the value that’s created in that initial discovery and resource development phase may not be exceeded again until these projects actually go into production, often times many years later.
This is a team that’s been serially successful, in terms of finding large deposits and developing name those and advancing those. We really see that as the opportunity for our investors to participate in that process.

On the alluvial gold business, what we’re focusing on is acquiring large land packages, getting them permitted, and then inviting experienced operators to come in and pay us a royalty on production. So it’s really a combination of both value creation through new discoveries and production royalties that define the opportunity with Metallic Minerals.
Maurice Jackson: Switching gears, I learned from Rick Rule and Doug Casey that the people running the business are equally, if not more important, than the latent material on the ground. Mr. Johnson, please introduce us to your board of directors and the management team and what unique skill sets do they bring to Metallic Minerals?
Greg Johnson: I think this is really an exceptional group of explorationists and professionals. We’ve worked together in the past with other companies. Many of us worked with the well-known large producers such as Barrick Gold and others, and were key members of leading explorer/developers such as NovaGold, Trilogy Metals, Wellgreen and Northern Free Gold. This is a group that has been credited for the discovery and advancement of some of the largest deposits in North America, including the Donlin Creek Gold Deposit in Alaska, now over 40 million ounces of reserves; the large Galore Creek Copper, Gold, Silver Deposit in British Columbia; and the Wellgreen Platinum Nickel Copper Deposit in Yukon. This is also a group that has been involved in permitting mines in Yukon, and has been recognized for its environmental stewardship and our approach to business.

It’s exceptional to see an explorer have the depth of experience that we have in this team with many people having 20 to 30 years or more experienced in the industry. I think it really was an opportunity for a great group of people who’d worked together in the past to be able to come together to work on some truly exciting projects. Where they saw the potential to create value, to be an equity shareholder and to have some fun working on some really exciting projects.
Maurice Jackson: Let’s talk about the stock, tell us about your share structure, options, warrants and cash position.
Greg Johnson: The company is a relatively new company, founded in middle of 2016. Now, we’ve got 61 million shares outstanding, and with options and warrants, it’s about 87 million fully diluted. Current market capitalization is approximately $15 million and we’ve got about $1.3 million in cash as of our last quarter, and we’ve got about $1.8 million in callable warrants that are deep in the money, and we are debt free. We’ve got a good tight share structure, we’ve got probably trading something on the order of about 1 to 2 million shares a month.

On a relative trading basis, you will see that the Metallic Minerals has held up well against both the Silver ETF as well as the GDXJ shares, the Junior Miners ETF. I think that’s largely because our shareholders recognize the long-term value in the Keno Silver district and the potential opportunity to participate in that discovery process. I think that we’ve been able to demonstrate value creation despite a very challenging market, through the results we’ve had to date and look forward to continuing to deliver on those kinds of results.
Maurice Jackson: What was your budget this year on Keno Silver and MacKay Hill?
Greg Johnson: We spent about $2 million at Keno Silver, and about $500,000 at Mackay. At McKay, we are advancing towards a drill targeting stage and should be ready to drill for 2019. At Keno, a combination of target development and refinement, and drill testing at the three most advanced targets on the property, where we’ve done step out drilling to continue to understand the scale and potential of those opportunities.
Maurice Jackson: Tell us about your burn rate.
Greg Johnson: Our burn rate is quite modest. One of the benefits with the Metallic Group of Companies is that we’re sharing an admin team and office space. We’re really focused on keeping costs low, terms of running the company, being able to focus money in the ground. We’re probably running at about $50,000 a month, including our technical team, to run the company, and we’ve got some opportunities to reduce those numbers further. This is really all about trying to focus funds on doing value creating activities, and that’s really money in the ground and money at the drill bit.
Maurice Jackson: Do you have institutional investors at this point?
Greg Johnson: Even though we’re a relatively newer company, we do have several mining focused institutional funds. We’ve got one group out of Europe already and two of Toronto, making up about 11% of the shareholders, and then we’ve got about 30% of the shares held by high net worth individuals, and management and board is one of the largest holding groups at 25%.
Maurice Jackson: What is the float?
Greg Johnson: We are probably looking about 30 million shares and probably significantly less as the actual available stock that’s out there for trading. It’s fairly tightly held, though we have pretty good liquidity for a smaller company in the sense that we’re trading at a couple of million shares a month on most months.
Maurice Jackson: All right, sir, you survived, multilayered question here. What is the next unanswered question for Metallic Minerals? When can we expect results and what will determine success?
Greg Johnson: The next few months should be an exciting period for the company. We’re expecting news results from both Keno Silver and MacKay Hill coming out over the next couple of months, similar to last year. There has been considerable progress on both projects and we continue to develop and advance new targets at both.
In addition, with the expansion of the resource at Bermingham that was announced recently by Alexco, and with them advancing that into production very shortly, that should draw attention to the district over the next six months and should be a positive catalyst for Metallic Minerals.
The Keno Silver project is an ongoing opportunity for value creation. It’s a very large land package, in 2019 we’ll have nine targets that are a drill ready, including the three that are at the early resource delineation stage. We’ve got another 20 targets that were advancing towards drill testing. This is a property that’s got a long history of discovery and production and we will continue to be focused on building out that value for our shareholders.
We’re also very bullish on the silver price. Looking at where we are in the metal price cycle, and the historic returns that have been seen particularly in the silver sector coming out of these market bottoms, we think this is an excellent time for investors to be looking at high quality names in the precious metal space, and particularly in silver.
Maurice Jackson: Mr. Johnson in the introduction we alluded to the Metallic Group of Companies, please introduce us to them.
Greg Johnson: In early 2018, Metallic Minerals and Group Ten Metals announced they were forming a collaboration as part of the Metallic Group of Companies, with some common directors between the companies and a similar approach to business. Group Ten Metals is focused on platinum and palladium along with nickel and copper, in the Stillwater District, of Montana. In October, we announced the newest company to join the group, Granite Creek Copper, as a newly launched copper focused exploration company with an exciting project right next door to a high-grade copper producer in the Carmacks District of the Yukon.

These three companies share a common philosophy and approach to business; all three have focused on acquiring large blocks of brownfield holdings during the low part of the metal price cycle next to operating mines so that the infrastructure and facilities are already in place. All of these show multiple targets that have potential for new discoveries, with targets that start at surface.
With these operating mines next door, it really provides an opportunity to be able to fast track development on these targets by utilizing the existing infrastructure in their respective districts. There is the potential for partnering with those operators or if we’re successful in discovering very large scale deposits, which we believe is the potential in these properties, to be able to see perhaps even the entire district become a target for consolidation by even larger companies.
The Metallic Group of Companies are reducing costs by having a common admin group and CFO, as well as allowing us to have a deeper technical team with some specialists that can be shared across the group.
It’s an exciting group of companies with a common philosophy. Our objective is to build real value for the Metallic Group investors going forward.
Maurice Jackson: What did I forget to ask?
Greg Johnson: Well, I think that was a pretty comprehensive discussion. One last point that’s probably worth mentioning is regarding our newly launched copper exploration company, Granite Creek Copper. We have just announced that we are undertaking an initial offering on Granite Creek Copper, and interested accredited investors can contact us if they would like to get additional information on that private placement opportunity.
Maurice Jackson: If one wants to get more information on Metallic Minerals, please share the website address.
Greg Johnson: Our website is http://www.metallic-minerals.com.
Maurice Jackson: As reminder, Metallic Minerals trade the TSXV symbol MMG, and on the OTCQB symbol MMNGF. For direct inquiries, please contact Chris Ackerman at 604.629.7800 Ex.1, he may also be reached at info@metallic-minerals.com.
Last but not least, please visit our website www.provenandprobable.com where we interview the most respected names in the natural resource space. You may reach us at contact@provenandprobable.com.
Greg Johnson of Metallic Minerals, thank you for joining us today on Proven and Probable.
Maurice Jackson is the founder of Proven and Probable, a site that aims to enrich its subscribers through education in precious metals and junior mining companies that will enrich the world.

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Brien Lundin, publisher of Gold Newsletter, sat down with Maurice Jackson of Proven and Probable to discuss precious metals and their relationship with recent Fed actions and the dollar.
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http://www.streetwisereports.com/article/2018/10/22/brien-lundin-the-fed-the-dollar-and-precious-metals.html
Maurice Jackson: Joining us for a conversation is Brien Lundin, the president of Jefferson Financial, helping to protect your world.
Please tell us about Jefferson Financial and what type of services you provide.
Brien Lundin: We are essentially a provider of investment information. We publish Gold Newsletter, which is the oldest precious metals advisory in the world, having been started by Jim Blanchard in 1971 as a way for him to advocate for the return of gold ownership, legalized gold ownership to American citizens. And I also produce the New Orleans Investment Conference, an annual event that Jim Blanchard also started in 1974 after he was successful in helping to get gold legalized. He had an investment conference to teach American investors how to buy gold, how to invest in the gold markets, and silver, and it’s been going on ever since. We have the oldest, and I believe the most respected investment event out there.
Maurice Jackson: We brought you on today to get your insights on a number of topics, and I would like to begin our discussion with the Federal Reserve and its commitment to increase interest rates and reduce its debt obligations on its balance sheet. I have to begin by asking you, is that even possible for the Fed to unwind its balance sheet?
Brien Lundin: Well, it can unwind its balance sheet, I think the key question is at what pace it can simply let the obligations run off as they mature, which would take quite literally decades for that to happen. But the key is, can the Fed do it without unforeseen, or dangerous consequences to the U.S. economy and stock market. And frankly I don’t think it can, as it increase its balance sheet as it was the buyer of last resort to keep interest rates low. And as the Fed had, as you know, an unprecedented program called Quantitative Easing, which was just money printing, all of this to support the market. We saw the effects in not retail price inflation as many of us feared, but in financial assets inflation, which to be fair, was their goal all along.
On the way up, as the balance sheet was rising and as quantitative easing was hitting its stride, the correlation between the Fed’s balance sheet and the S&P 500 was around 97%, so the Fed inflated the stock market, bull market. It was directly behind it.
And the question now is, if they had that much of a correlation on the way up, well, now that they’re on the way down, are we going to have a similar correlation? And I think the events of the week when the DOW lost over 1,400 points over a couple of days is powerful evidence that the Fed won’t be able to get away with it without some dire consequences in the equity markets.
Maurice Jackson: Speaking of those dire consequences, from a macro perspective, what type of impact are the Fed’s decisions having on global markets? And should we be concerned about contagion and capital flight from peripheral markets?
Brien Lundin: Well, it’s actually attracting some money to the U.S. because you have, on a relative basis, higher rates in U.S. treasuries than you have in similar instruments in Europe and elsewhere. So it is attracting money and helping to support the dollar, but I don’t think it’s making the dollar strong. If anything, it’s preventing the dollar’s decline because the Fed wants rates to rise now, it really can’t do it much longer for a number of reasons.
First , the Fed is going to crater the economy if it gets rates to high. Second, we can’t, because of the large debt loads we have right now; the U.S. simply cannot bear the burden of higher interest rates while we have this kind of a debt burden. If interest rates got to historic levels, and by historic levels, I’m talking of 10, 15 years ago where the interest rate burden on the Federal debt was on the order of 5–6%. If we got to those levels again, then the interest burden on the federal debt would be on the order of $1.2 trillion. And that’s far greater than the whole deficit is right now.
So, I just don’t think that’s politically possible. So if we’re looking at interest rates of 5–6% on the Federal debt, we’re talking about a Fed funds rate that probably around 3%. I think that’s the upper limit.
Maurice Jackson: You referenced the U.S. currency’s decline. You know the U.S. for all intents and purposes is in a trade war. And President Trump recently shared he’s not in favor of the Fed’s recent rate hikes. Is the Fed jeopardizing his position in discussions with his adversaries in the trade war?
Brien Lundin: I don’t think his trade war really affects that so much. I think one of the reasons why Trump is out there bemoaning and belittling the Fed so vociferously is because he’s looking for an excuse in case the economy starts downward. Or in case there’s a serious stock market decline. He wants to be able to blame it on someone except himself, and the Fed will be the obvious target. So he’s kind of setting the table for that, I believe. Plus he’s obviously in favor, and his administration is in favor, of low interest rates and debt. I think that’s what we’re going to keep getting.
Maurice Jackson: Now when do you foresee the Fed’s rate hikes ending? And what may be the effects upon the conclusion, long term?
Brien Lundin: Well, if the upper limit is around 3%, that means we have about three more quarter-point rate hikes ahead of us. If the Fed does one in December, which everybody expects, then that means it will only need a couple more to get to 3%, and that could happen in the first half of next year.
I don’t think that’s a widely understood or appreciated fact right now. I think there’s some spark money that’s been seeing that for some time, in realizing that the Fed is in the back half of its rate hike campaign, while other currencies, other central banks, like the ECB and the Bank of England, have yet to begin their rate tightening. But they are on schedule to do so very soon. So I think there’s already been a shift in large money allocations from the dollar into the euro and the pound. And I think we’re going to continue seeing that, and I think that’s the reason why the dollar has not been able to, say, break out of the 95 range on the dollar index and why I believe the dollar will be headed lower over the next six months or so.
Maurice Jackson: Speaking of smart money, we like to remind our audience that we refer to money as physical gold and physical silver. Talk to us about the recent price movement in gold.
Brien Lundin: What’s really been interesting about gold is that it has risen on a number of occasions recently when the stock market was crashing and yet the dollar was strong. Now typically that would argue that the buying is safe haven related. And, Maurice, I never like that as a driver for gold. I’m never in favor of that as a reason for gold to go up for any sustained period because these, the safe-haven type buying, these geopolitical political issues, these little flash crises, they come and go, and they don’t provide a sustained driver for gold. What really drives gold over the longer term are concerns over monetary issues, concerns over debt and currency depreciation and the like, and inflation.
So when you see the dollar going up along with gold, that’s a sign that the buying is safe haven related and probably not lasting. However, at the same time, and even on those days when the stock market was crashing, the gold stocks were rising. They were very strong and that argues for a more of a long-term approach to the gold buying. That’s an indication that people are buying gold because they see longer-term monetary based factors at play. So it’s a little bit of both right now, and I find it very interesting. It’s going to shake out one way or the other, but what’s encouraging is that we’re seeing indications of both types of demand for gold. But both are contributing to higher gold prices. And in fact, if we can get enough of a gain in gold to spark a short covering rally, by all the short speculators out there, then I’ll take that. That’s fine with me. That could be enough to really start a longer-term rally in metals.
Maurice Jackson: I have to ask this as well. What prudent action should someone take, based on today’s discussion regarding physical precious metals?
Brien Lundin: Well, they need to own physical precious metals. That’s what I tell everyone; if you’re a newbie to the sector, make sure you have your physical precious metals component, the foundation of your precious metals allocation. Make sure you have that in place, make sure you have it accessible. Don’t put it in bank safe deposit boxes. Make sure you have access to it. I’m a big fan of small denomination silver coins that are junk, you know, old junk silver. As an important component of what somebody should own, but they need to get the physical component in place. That’s the first thing, and even some experienced gold and silver bugs to the sector, they like to play around in the mining stocks, but a lot of them don’t have that physical component in place.
And you really need to, that’s your insurance, it’s something everyone needs. And has to have an insurance against not the unforeseen, but against the inevitable.
Maurice Jackson: You said a lot of information there. I’d like to just recover there for a second. Number one you referenced not to have it in a safe deposit box. Could you please expand on that for a little bit?
Brien Lundin: One of the things you’re insuring yourself against or hedging against by owning physical metals is a bank holiday. So if they lock the banks, how are you going to get to your precious metals? Now that limits your storage options, but there are still a number of options out there, including some in a personal safe, some in other security centers. And then if you’re going to have a fairly large allocation of physical, you can have some in storage facilities both domestic and international.
I tell people that I have very good friends in the precious metal storage business. Yet, I still recommend that if you’re going to have a substantial physical bullion investment, to spread your storage around, because you just never know. You never know what’s going to happen in each specific company or facility. And that’s a risk that you can easily diversify and really should.
Maurice Jackson: You know another fact that a lot of people aren’t aware of, is the safe deposit boxes at your banks, are they FDIC insured?
Brien Lundin: No, they’re not a deposit. So they’re not insured.
Maurice Jackson: That is very important for for our audience to understand.
Brien Lundin: And they’re not insured. The authorities have access to those with a subpoena. Interestingly, one of the things we discovered here in New Orleans during Katrina is that you should also not have a safe deposit box on the first floor of a bank. Because there are a number of safe deposit boxes in the New Orleans area that were under 12 feet of water for a weeks at a time after the hurricane. And they are not waterproof by the way, so a lot of these things you need to consider when looking to store precious metals and valuable documents.
Maurice Jackson: Another point you made was regarding mining stocks. I think a lot of individuals who are investors, particularly in the secondary market, are not aware that they can own physical metals, so they’re under the impression that they own mining company that owns gold and that is incorrect. You are only basically a company that is mining, but they don’t provide you the physical metal. When you purchase the stock, you’re going to get back cash, you’re not getting back the metal. Very important for us to understand here. If I may ask you this sir, we all have our favorites, of the big five, which are gold, silver, platinum, palladim, and rhodium, which ones have your attention and why?
Brien Lundin: Gold and silver primarily; the other three have large industrial components to them. So there are other factors, and they make good investments and good speculations in certain times, but gold and silver are the pure monetary metals. A lot of people talk about the industrial component to silver, but quite frankly, if silver was only valued on its industrial value, it would be $5 an ounce or less right now. So the rest of that margin or premium in its price is really monetary value. If you like gold, you have to love silver because silver is going to follow gold, but it’s going to move more than gold in the same direction. So it offers kind of an innate leverage to the gold price. If gold’s rising in terms of the fiat currency, silver’s going to also rise but to a greater degree.
Now there’s the downside of that as well; it’s going to go more quickly to the down side in a down market. But it is something that I tell people they really need a hold, a blend of the two. But for your hedging against financial catastrophe or a steady devaluation of the dollar, you really need to own gold and silver primarily.
Maurice Jackson: May I ask you this as well? The gold-silver ratio, how does that factor in your decision on purchasing?
Brien Lundin: Well, I think it determines the health of a market more so than timing, perhaps a little bit about value, or the relative value of the metals. But when the gold-silver ratio is falling, that means that silver is outperforming gold to the upside. And that is the hallmark of a good, strong, consistent, sustainable bull market in gold. And when the opposite is in effect, then it’s not positive, it doesn’t reflect on strength in the metals in general. I don’t don’t recommend that people trade the gold-silver ratio, because if you say sell gold and buy silver because the ratio is falling, then you’re mitigating your potential gains because they’re both going to rise, or they’re going to head in the same direction.
So if they’re both rising and you’re selling gold, you’re cutting a good portion of your potential gains out of the equation. So I don’t like trading your ratio, I like to look at it as a signal of the relative strength of the trend in one direction or the other.
Maurice Jackson: Interesting perspective, and thank you for sharing that. Switching gears, the New Orleans Investment Conference will be conducted November 1-4 in beautiful downtown New Orleans. Mr. Lundin, tell us about the world’s greatest investment event? Who are some of the featured speakers and discussion topics?
Brien Lundin: Well, I touched on it a bit earlier. The conference has been around since 1974 when Jim Blanchard started it, and Jim was a fairly flamboyant kind of a guy. He really went over the top with inviting big name speakers to the conference, so we’ve inherited that legacy and try to burnish as best we can. And so we get speakers here that you won’t see elsewhere, in general the line-up of speakers that we bring to our attendees is higher quality I believe than you’ll find anywhere else.
This year we have Robert Kiyosaki, we have political commentators Mark Steyn and Jonah Goldberg. We have James Grant who is one of the most eloquent advocates for gold in particular, most eloquent commentators on the financial markets out there. We have Doug Casey, of course, who’s always a big fan favorite. We have Peter Schiff, we have Dennis Gartman, Rick Rule. We have Guy Adami from CNBC who’s a really interesting guy. We have Ben Hunt who writes a blog, and doesn’t speak very often at conferences, but he has a blog that’s widely read by some really smart people in the markets.
And then we’ve got dozens upon dozens of other speakers, experts in just about every sector, but with a particular emphasis on metals and mining stocks.
Maurice Jackson: What type of attendees usually attend the New Orleans Investment Conference?
Brien Lundin: Well, they are smart, number one, because you have to be smart to pick this event to come to it, because it caters to really smart investors. It also caters to self-directed investors; these are people who are independent thinkers, maverick thinkers, they’re information hungry. They may have a large portion of their portfolio with money managers, but a large portion of their portfolio is directed by them, and according to the views that they have.
And the conclusions that they have after a lot of investigation of the markets and trends and listening to a lot of people. So it’s a smart group. It’s a successful group. One of the things I tell our attendees every year is that, yeah, we have great people, top of the line experts on the stage, but look around you. There are literally hundreds of very successful investors around you at this event. And I’ve never seen one of them who wasn’t willing to share his ideas and strategies, you know? And best thoughts on the markets and where they’re heading. So there’s a lot of fantastic market intelligence just within the crowd at our event.
Maurice Jackson: There’s a number of intellectual capital there at the conference. And speaking of the attendees, this will be my third year in attendance, and I have to admit I’m looking forward to meeting the attendees equally as I am to the guest speakers. The networking opportunities with some of the best minds all in one place is priceless. If you do not have your tickets, we welcome you to visit our website, provenandprobable.com and on the right hand column of the website you will see an image for the New Orleans Investment Conference. Click on the image, and you will be taken directly to the registration page.
Before we close, tell us about the gold newsletter and how we can retrieve your information on a regular basis.
Brien Lundin: Well, Gold Newsletter, as I mentioned, before is the oldest and I would say one of the most respected and successful newsletters or advisories on precious metals and mining stocks out there. Jim Blanchard started it in 1971, literally the day that Nixon closed the gold window. And it’s an important history in the hard money movement in advocating for the very legalization of gold in America. So we have a long, illustrious history. We’re trying to build on that every day, and we cover not only the economy, geopolitics and the kinds of things that affect all of the asset classes, but we do specifically focus on precious metals and what’s driving them and we cover a number of mining stocks. Typically junior mining stocks that have the potential to rise when precious metals prices rise or on discovery of new deposits. So that’s kind of our casino as, or where we have a number of high potential, higher risk for sure, but much higher potential investment opportunities.
Maurice Jackson: You know, Mr. Lundin, for someone that wants to get more information regarding Jefferson Financial, please share the contact details.
Brien Lundin: Well, for Gold Newsletter you can go to GoldNewsletter.com very simply, and for the New Orleans Investment Conference, NewOrleansConference.com, although I believe you’ll have some links as well, Maurice, that will get people some special opportunities to the conference.
Maurice Jackson: I certainly will sir. And as a reminder for our audience, we are licensed brokers to buy and sell gold, silver, platinum, palladium and rhodium, off shore storage accounts, and precious metals IRAs. To have conversation, please email Maurice@MilesFranklin.com, or call 919-274-5680.
And last but not least, please visit our website ProvenandProbable.com, where we interview the most respected names in the natural resource space. You may reach us at contact@provenandprobable.com.
Brien Lundin of Jefferson Financial, thank you for joining us today on Proven and Probable.
Brien Lundin: Great to be with you.
With a career spanning four decades in the investment markets, Brien Lundin serves as president and CEO of Jefferson Financial, a highly regarded publisher of market analyses and producer of investment-oriented events. Under the Jefferson Financial umbrella, Lundin publishes and edits Gold Newsletter, a cornerstone of precious metals advisories since 1971. He also hosts the New Orleans Investment Conference.
Maurice Jackson is the founder of Proven and Probable, a site that aims to enrich its subscribers through education in precious metals and junior mining companies that will enrich the world.

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JAYANT BHANDARI | Gold: To go up as the Third World Implodes

Nevsun Resources (NSU), etc.

Sophisticated investors often follow gold price in US dollar. This is despite the fact that the biggest buyers of gold for wealth protection purposes are in the Middle East, South Asia, and South-East Asia. These buyers do not think in US dollar terms.
It is hard to believe, but the Middle East peaked economically in the 1970s–it has been going downhill ever since. I call them the Third World, for they failed to change culturally despite having access to financial resources. In fact, in the Middle East (and recently in Turkey, and increasingly in Malaysia and Indonesia) fanaticism grew exactly when they were becoming rapidly rich.
Having failed to develop positive cultural underpinnings, the Third World’s growth rate is falling and social instability is rising. China is the only exception.
The real problem of today is not in the USA or its currency (which are clearly showing signs of improvement, for now), but the Third World. As the problems of the Third World become more recognized, I expect gold demand to rise.
 

I give my views on the reality of the economies, with charts and statistics, of the Third World in the linked article.
On investments…
A combination of the lack of faith in the junior mining business and the approaching tax-loss selling has resulted in another fall in share prices. Here are companies that I am hoping to buy:

  • FPX Nickel (FPX; C$0.08)
  • Amarillo Gold (AGC; C$0.25)
  • VR Resources (VRR; C$0.17)
  • Salazar Resources (SRL; C$0.11)
  • Chalice Gold Mines (CXN; C$0.13)
  • Renaissance Gold (REN; C$0.16)
  • Kangaroo Resources (KRL.ASX; A$0.12)
  • Nkwe Platinum (NKP.ASX; A$0.076)
  • Keras Resources (KRS.LON; £0.0031)
  • Avrupa Minerals (AVU; C$0.05)
  • Altus Strategies (ALTS; C$0.045)
  • Energold Drilling (EGD; C$0.24)
  • GFG Resources (GFG; C$0.25)
  • Nevsun Resources (NSU; C$5.70)

Some people might wonder why I am suggesting NSU. There is still >5% upside left in it. If I make 5% in two months, it amounts to annualized 34% profit (Expected closure date of the merger: 31st December 2018).
If for any reason the closure date of NSU merger gets delayed by even a single day, I expect the share price to increase on such a news and then fall again early next year. This pathology exists because of the way taxation is structured. Understanding this pathology might help make some extra money.
Warm regards,

Jayant Bhandari

Associate: Rajni Bala

Disclaimer: All information found here, including any ideas, opinions, views, predictions, forecasts, commentaries, suggestions, or stock picks, expressed or implied herein, are for informational, entertainment or educational purposes only and should not be construed as personal investment advice. While the information provided is believed to be accurate, it may include errors or inaccuracies. The sole purpose of these musings is to show my thinking process when analyzing a stock, not to provide any recommendation. I will not and cannot be held liable for any actions you take as a result of anything you read here. Conduct your own due diligence, or consult a licensed financial advisor or broker before making any and all investment decisions. Any investments, trades, speculations, or decisions made on the basis of any information found on this site, expressed or implied herein, are committed at your own risk, financial or otherwise.

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Exclusive Interviews Precious Metals

ABEN RESOURCES | Canadian Explorer Reveals Year-Round Plan to Maintain Momentum

James Pettit, CEO of Aben Resources, in conversation with Maurice Jackson of Proven and Probable, discusses his company’s summer exploration in the Golden Triangle and how the company plans to keep the momentum going throughout the year.

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http://www.streetwisereports.com/article/2018/10/19/canadian-explorer-reveals-year-round-plan-to-maintain-momentum.html

Canadian Explorer Reveals Year-Round Plan to Maintain Momentum 
Contributed Opinion

Source: Streetwise Reports  (10/19/18)

James Pettit, CEO of Aben Resources, in conversation with Maurice Jackson of Proven and Probable, discusses his company’s summer exploration in the Golden Triangle and how the company plans to keep the momentum going throughout the year.

Maurice Jackson: Joining us today is James Pettit, the president, CEO and director of Aben Resources Ltd. (ABN:TSX.V; ABNAF:OTCQB).
In our last interview, we discussed the next unanswered question for Aben Resources and that would be drill results. This week Aben Resources issued a press release conveying some intriguing results. Before we begin, for someone new to the story, who is Aben Resources and share with us the names and location of your three projects beginning with your flagship.

James Pettit: Aben Resources is a gold exploration company based out of Vancouver listed on the TSX Venture Exchange. Our flagship property is the Forrest Kerr property. It’s in the Golden Triangle, which is a region of northwestern British Columbia, which has got a tremendous history for high-grade discoveries, the likes of the Snip mine and the Eskay Creek mine discovered 30 some odd years ago. Eskay at the time was one of the highest grade mines in the world. Since then, there’s been a lot of discovery that’s happened over the years in terms of more gold, silver and copper. These are still in the development stage.

Many of them are waiting for possible higher prices for the commodity, but they’re probably the largest untapped development projects in the world, especially the copper projects. Now specifically with us, with the Forrest Kerr Project, we acquired that ground three years ago, and started assembling it. I put three claim groups together. We chose those because they’re on a major structural feature, which we look at as one of the controlling structural features in that whole Golden Triangle area. It’s called the Kerr Fault and it’s a big, big fault that you can see from space.

That is an area you want to be near for discovery potential and then there’s other geologic features that you want to be coincidental to that, and we’re right in between them. We’re in a good area. We’re getting a lot of attention. The market’s certainly paying attention to everything that goes on up there. The most recent new production up there is Pretium Resources’ Brucejack Mine, which is a very high-grade gold mine. That really brought about $2 billion in value to its investors. There’s lots of potential there. We’re excited about it.
That’s why we’ve been so concentrated on it. This year we’ve drilled now I think just short of 40 holes. We’ve got 24 to be released still. That’s going to take us through the rest of the year almost. We have another project that’ll get us through the winter because the weather in the Golden Triangle is pretty severe. It’s coastal mountain range right beside the panhandle of Alaska and gets a tremendous amount of rain or snow. It becomes almost impossible to work up there for the winter, unless you’ve got just a huge amount of money and resources to do it. That whole area will be going quiet soon.
We have another project called the Chico Project, which is in Saskatchewan, just south of what used to be called the Claude Resources gold mine. It’s been bought by Silver Standard for $337 million. Silver Standard is now called SSR. It acquired the ground between the Chico property and its property, which it bought from Claude Resources. Basically we think we’ve got an extension of what SSR is looking for because SSR’s interest now is to expand the known resource. To keep that mine alive for the next 20 years, it needs to find more of a resource.
https://www.abenresources.com/site/assets/files/4301/abn_chico_location_and_highlights.514x0-is.jpg
SSR has got a good resource to start with that itbought, but I think it has probably got five to seven years left. SSR wants to take this further. It’s drilling on the ground between them and us now. It has acquired all the ground. It’s giving us a good model to work with. We’ll go in there in the winter. It’s the best time to drill in Saskatchewan because it’s flat, it’s frozen. The lakes are frozen, so we can access an egress very easily. Essentially, we just put up the camp, bring in the rig, and move the rig with a helicopter if need be, or we skid it. We’ll be going in there in February. That’ll keep momentum going for the company.
Then we’ve also got a project up at the Yukon called the Justin, which is tied right on to Golden Predator’s ground, what it calls 3 Aces. We’re right on strike to the 3 Aces structure. We’ve done a little bit of work there this year in terms of trenching with the mechanical backhoe. We’ve got that up to the site by helicopter, and we’re waiting on assays. We’ve spent 10 days doing this. We think we’re sitting right on top of something very similar to 3 Aces, which is a very high-grade epithermal or hydrothermal quartz vein system. It’s very rich.
https://www.abenresources.com/site/assets/files/4303/justin_location.567x0-is.jpg
We’ll know when we get the assays. If they come back the way I think, we’ll be setting up a program for next year. That’s a good project to have in the shoulders between the Forrest Kerr or before the Chico mine’s down in the winter. We can’t really get into the Forrest Kerr until June-July, so we can get up into this region in the interim and keep moving them forward. We’ve got three really good projects to work on, but our flagship is definitely Forrest Kerr because the audience is there. It’s an area play. We all love area plays. That’s where we stand right now.
Maurice Jackson: Well, speaking of the Forrest Kerr, let’s focus our discussion today on the Forrest Kerr. We have some exciting news; what can you share with us?
James Pettit: We have a new zone. We’ve been working and concentrating on the North Boundary Zone, but this season we drilled three holes to the south of the North Boundary Zone. It was a kilometer and a half south. We put in these three holes because we’re trying to buy time, so we could get more assays back because our concentration is the North Boundary Zone and we needed guidance from some of the assays. We did do that, but we decided to drill where we did because there is a geochem anomaly and target that we wanted to test and it was coincidental with an old geophysical survey that showed something promising.

Geophysical anomalies are interesting, but certainly not like a geochem where you actually get the gold in the sample and that’s why you’re there. You have a good geophysical and geochem target to work with, and it turned out that we did the right thing. We’ve hit something there. It’s not as high-grade as the North Boundary appears to be, but it’s broad and it’s mineralized. I’ll use the best of the three holes, hole 21. You’ve got almost 380 meters in that hole is well mineralized, primarily gold, from trace level of 0.1 all the way up to 5 grams every interval.


The way we set it up, it’s almost like a graph. You very rarely see that much continuous mineralization like that. Well, it’s a lot of important information about the tenure of mineralization in that region. That’s definitely has our attention. We need to drill more holes there. We’ll get to it next year. The season’s definitely winding down up there right now, but it’s going to give us a lot of info.
Plus, we have now flown the entire valley using an EM geophysical survey, which encompasses both boundary zones to the north and south. We’re actually just waiting for the results and the interpretation of the survey. We’ll take that information at increased amount of geochem sampling that we’ve done, as well as all the assay results that we’ll have for the season. We’ll use that and compile some significant information for next year and work up our next series of targets.
Maurice Jackson: This is quite intriguing, exciting, any adjective you like to associate with it. Congratulations, sir. Now prior to this week’s press release, Aben Resources was able to successfully complete a financing and secured a major shareholder. Share the details with us, sir.
James Pettit: The first hole we put out this year was spectacular. It had an interval of 10 meters of roughly 38 grams. I mean that’s spectacular in itself, but within that was six meters of 62 grams gold. That’s like two ounces. Spectacular results. That got the market’s attention. The stock really moved up. The interest for financing was immediately apparent. We did announce a $4.2 million financing and half of it was taken by a fellow named Eric Sprott, who is a bit of a gold legend.
He started Sprott Securities, which now has a big presence in Toronto and also a big presence in Carlsbad, California. He is the consummate and ultimate gold bug. He loves gold and is not afraid to take a big stand in an early-stage deal like this. This is the exploration phase. This is potentially where you can absolutely make the most. You’re in at a price that seems very cheap and the market cap is low and you have this discovery. From that point on, you want to keep it growing and the market reacts correspondingly. He’s well aware of that. He’s not afraid to take a shot. He does it with a number of companies.
But when he gives his blessing to it, it’s pretty substantial. Then we also raised another million dollars after that largely because his name was now attached to the original financing, so we raised another just short of a million dollars flow through. The company now has just over $7 million. We’ve basically got next year’s program paid for.
Maurice Jackson: That leads to my next question, what is the burn rate and does Aben Resources plan to return to the market in the foreseeable future for another financing?
James Pettit: Well, the second question’s answer is no, we won’t. We don’t need to. Our burn rate varies from where we are in the area if we’ve got things on the go, the drill program, etc., our burn rate, and I’m just talking about basically our G&A and marketing burn rate, that can grow to $200,000 a month. Then the field work is always budgeted. This year we had budgeted about $1.5 million and we increased it by about $1 million. This year all in all we spent about $2 to 2.2 to 3 million. I haven’t got the finals number in. That’s all in for that project. We doubled the size of the drilling program.
We’re getting really close to shutting down, but I don’t see it going over that. For the G&A side, the operations of the office in Vancouver in marketing because we do. It’s important to spend money on marketing. We travel a lot marketing this project. That runs about $200,000 and varies up to $250,000 a month. Then when we aren’t working, everything obviously slows down, but then we are still marketing because we want people to know what we achieved. We always have goals. We want the market to understand we’re achieving the goals. I think that’s quite important.
Maurice Jackson: Indeed it is. Switching gears onto management. Aben’s management team has a proven pedigree of geological and business acumen. I want to focus on potential amalgamations in the sector should this occur. Share some of the past successes of management rewarding their shareholders on previous arbitrage successes.

James Pettit: Sure. Well, our chairman Ron Netolitzky, he’s like a serial M&A guy. The market really watches what he does. In the past, for example, he was in on the discovery of Snip and Eskay Creek up in this area. He’s got a very, very big following of people all over the world who have followed him through his career and starting there. He’s also very successful in Saskatchewan as well, specifically in M&A, Eskay and Snip. Snip was sold to Cominco way back and then Eskay ended up in Barrick’s hands.
Since then, there’s Copper Canyon, which he and Tim Termuende, who’s also on the board, sold that to Novagold and that became part of the Galore Creek Project, which is now in the hands of Teck and Newmont. My background, even though I’m not a geologist, is I started a company called Bayfield Ventures and eventually sold it in 2014 to New Gold as part of its Rainy River Project. The three of us have a pretty good background of what’s required. We’re always in contact. We maintain contact with majors all the time. I think given what’s happening in the Golden Triangle, majors are coming back. They’re starting to look again.
Last year Goldcorp did a deal with Colorado Resources just on a financing basis, $7 million. That was a surprise move, but it shows the interest I think. Osisko’s looking around there. Kinross is looking in the area. Barrick has showed its interest again. I think they actually have a buy back into the Snip deal because Skeena has got their hands on it and they’ve been working on it and trying to resurrect another zone in the Snip Mine. That’s our background. I think it stands out to be honest with you with the amount of M&A that’s been done between the three of us.
Maurice Jackson: Talk to us about the share price. The market is rewarding value speculators.
James Pettit: Absolutely. This is the level to enter in this market. Speculators want to be involved with a company that’s active, has good projects, good people, etc. Then take a position and wait for them to do what they say they’re going to do. In our case, last year was the discovery of the North Boundary Zone. This year was the reaffirmation of it with a tremendous hole that you could really say is the discovery hole. We need to make it bigger now. That’s our job. That’s where you get this big appreciation in stock price based on speculation.
Then going forward as you put out more and more results, the market will go up and down and follow the results. I’m seeing that this year as opposed to last year, which was as soon as you finished drilling or came out with results and you got too late into September going into October, that market’s sold off. It just sold off because tax loss season is coming and they just wanted to be out of whatever they were doing. Because once you’re finished, it’s a long cold winter to get through and you’re sitting on a stock. Like last year, we went back down to $0.10.
That’s not going to happen this year because I’ve got two other projects that are good and we’ve got a really good shareholder base now. We have so much liquidity this season. We ran from roughly $0.10, maybe $0.12 up to $0.50. Now it’s settled back in the low to mid $0.20s now. It’s trading good volume. I think probably since July or beginning of August we’ve traded 150 million shares. That’s fantastic.
Maurice Jackson: That’s quite impressive actually. Yes.
James Pettit: It’s really very impressive. We put out a bunch of holes before this most recent one around that discovery zone. They were less impressive. They were really good. They’re all very well mineralized. They just weren’t 30 some odd grams. Those that wanted that to be repeated sold out and that just meant there’s a whole lot of people who came into the market that they sold out, other people bought it. We’ve got a really good floor here, the $0.20 to $0.25 range. I think basically it’s a buy all day long. We still got 24 holes to put out.
Maurice Jackson: Yeah. We’re one of those other buyers. Speaking of the stock price, if I may just interject here, Warren Buffett and Rick Rule, they’re noted for sharing how the market rewards speculators that are prepared. In particular, and I’m going to paraphrase them, that you should not purchase a stock if you weren’t willing to see the price reduce 30% or more and be willing to purchase more. Now we’re on record, we purchased Aben Resources at $0.42 and we’re active buyers at current prices and we’re confident that the value proposition in our opinion continues to increase.
Mr. Pettit, before we close, multilayered question here, what is the next unanswered question for Aben Resources, when should we expect results, and what determines success?
James Pettit: The next unanswered question really would be how big is this and how robust is this boundary zone, including north and south. So far we’ve tapped into two zones. The very first priority target we had was the North Boundary Zone. Well, it generally was the boundary zone and we started in the north end and boom, hit it right away. When we prioritized the target zone, this overall property, the Forrest Kerr, we did it based on a compilation study of all the historic data. We came up with about 12 areas we want to go test. We’re still on the first one. Two years later we’re still in the first one. This boundary zone is four kilometers long and two kilometers wide.
It’s all based on geochem. There’s a big geochemical survey that’s been done there. We’ve added to it now and now we’ve completed the airborne. We could be there for a while. I think we’re just touching on it now. We’ve hit a few sweet spots. One’s confirmed as a sweet spot, the South Boundary Zone. I think by next year when we do some more holes we’re going to be surprised, but I think there’s going to be a lot more sweet spots there. We’re going to focus and vector in on where did this mineralization come from. That’s really what our job is. Figure it all out, get the structure identified and where it came from.
We know there’s at least three mineralizing events in the area, and we know there’s at least four ages of rock. That tells us there’s been four major events that have happened. With three of them, in came the fluids that brought the gold. Let’s find some of those feeders.
Maurice Jackson: Well, Mr. Pettit, we’ve covered the good. What keeps you up at night that we don’t know about?
James Pettit: Keeps me up at night? Well, being a good sleeper, not much keeps me up at night. Being in this business so long, I’m used to it. There’s always risks. What would scare me is we hit nothing for the rest of the holes. That would be a concern. I don’t foresee that. As long as everything stays on course, we’re good. I don’t really have a concern that would keep me awake at night.
Maurice Jackson: The last question I have for you, sir, is what did I forget to ask?
James Pettit: Most people ask me where do I think we’re going to go with what’s remaining this season? Obviously, I don’t have results. I don’t know, but I think we’re going to be pleasantly surprised. I think things are looking good. I think we’re in the right area for sure. Absolutely the right area. This is a very robust mineralizing system that we’re looking at. We’re right between the two big structural systems that we want to be in. I think for a discovery profile, we’ve got a really good one.
Maurice Jackson: Mr. Pettit, for someone listening that wants to get more information on Aben Resources, what is the website address, sir?
James Pettit: The website address is www.abenresources.com.
Maurice Jackson: As a reminder, Aben Resources trades on the TSXV symbol ABN, and on the OTCQB symbol ABNAF. For direct inquiries, please contact Don Myers at 604-639-3851. That number again is 604-639-3851. He may also be reached at info@abenresources.com.
As a reminder, Aben Resources is a sponsor of Proven and Probable and that we are proud shareholders of Aben Resources for the virtues conveyed in today’s message.
Last but not least, please visit our website www.provenandprobable.com where we interview the most respected names in the natural resource space. You may reach us at contact@provenandprobable.com.
James Pettit of Aben Resources, thank you for joining us today on Proven and Probable.
Maurice Jackson is the founder of Proven and Probable, a site that aims to enrich its subscribers through education in precious metals and junior mining companies that will enrich the world.
Disclaimer:
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SPROTT’S THOUGHTS | Stock Bull Cautions — “Always Know Where The Exits Are”

Stock Bull Cautions — “Always Know Where The Exits Are”

Oct 17, 2018 01:37 pm
By Albert Lu, President & CEO, Sprott Media
 

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Don Luskin likes what he sees. The economy, he says, is strong and poised for growth. The tax cuts are working, particularly in the small cap segment. Furthermore, the President’s approach to trade negotiations is sound.
In short, Keynesian animal spirits for risk are back and the future looks bright.
But, he adds, “Don’t be an idiot about it. Like in a plane, you always want to know where the exits are.”
The Chief Investment Officer of Trend Macrolytics recently visited our Southern California studio for a wide-ranging discussion on politics, central banks, trade wars and markets. It was my first opportunity to sit down with the author and columnist, who is also a regular on Fox Business Network.
For starters, there is no mistaking it: Luskin is an uncompromising stock bull. The economy, he insists, “… is in a cusp period, where the world has the potential to get out of the era of secular stagnation, and the new normal, and get back to growth rates and productivity rates that look like the old normal.”
He is also not shy about his support of the President’s economic policy and, in particular, tough stance on China and trade. “China is interfering with free trade more than we are,” he explains.
In Luskin’s assessment, the pros of Trump’s tough stance outweigh the cons, even if the tactic means higher consumer prices for Americans. “[Free trade is] the morally right thing to do,” he adds.
Yet, despite his unwavering optimism, when pressed, Luskin concedes that diversification is a worthy end in itself. Don’t be an idiot about it — remember the plane analogy?
But what if the nearest exit is behind you — like at Dow 26,000?
“Believe me … I own lots of gold,” he admits. “I also have lots of guns and ammunition … and penicillin.”
After all, what good is an exit without a parachute?
To watch the video interview with Donald Luskin, chief investment officer of Trend Macrolytics, click here.
To download the Trend Macro special report, “One Sell-Off, So Many Causes” click here (pdf)
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MAURICE JACKSON | Inside the Markets – Stock Market Plummets, What it Means for Precious Metals with Maurice Jackson

Original Source: https://www.stockpulse.com/inside-the-markets-stock-market-plummets-what-it-means-for-precious-metals-with-maurice-jackson
Today the stock markets were down significantly in the U.S. Have the bubbles begun to pop? And if so, what assets still remain on sale?
Fortunately Maurice Jackson of Proven and Probable joined the StockPulse network to explain the value propositions that currently exist, the opportunities in the mining sector, and what’s really important for investors to be aware of right now.