Interview with Walter Coles, Executive Chairman of Skeena Resources Ltd.

Our previous interview: https://www.cruxinvestor.com/posts/skeena-resources-tsxske-465000-oz-pa-high-grade-gold-production-4464

Recording date: 3rd July 2024

Skeena Resources (TSX:SKE) presents a compelling investment opportunity in the gold mining sector, with its flagship Eskay Creek project in British Columbia's Golden Triangle fully funded and progressing towards production. The company has recently secured a landmark C$1 billion financing package, positioning it strongly in a challenging market for mining companies.

Eskay Creek stands out for its combination of scale and grade, with projected production of nearly 500,000 gold equivalent ounces annually in its first 4-5 years. The November 2022 Feasibility Study outlines robust economics, including an after-tax NPV of C$3 billion at spot prices and an all-in sustaining cost (AISC) of US$687 per gold equivalent ounce. With an average grade of 3.6 g/t gold equivalent over the life of mine, Eskay Creek ranks among the highest-grade open-pit gold projects globally.

The financing package, comprising equity, a gold stream, senior secured debt, and a cost overrun facility, is notable not just for its size but also its structure. The equity was raised at a premium to market, while the gold stream is available before final permits – both unusual and favorable terms. The debt facility includes flexible terms allowing Skeena to pursue alternative funding if better options arise.

A key strength of Skeena's position is its strong relationship with the Tahltan First Nation, on whose traditional territory Eskay Creek is located. This partnership provides social license and mitigates potential operational risks. The Tahltan Nation benefits from tax sharing, an impact benefit agreement, and prioritization for competitive contracts.

Skeena sees significant growth potential beyond the current project economics. Potential avenues for increasing the project's value include mine life extension through satellite deposits like Snip, steepening of pit walls to access deeper ore, and inclusion of base metal credits in future economic studies. These factors could potentially drive the after-tax NPV from C$3 billion to closer to C$4 billion.

The company is keenly aware of execution risks and has implemented several mitigation strategies. These include over-capitalizing the project, building a six-month ore stockpile, focusing on internal team building, and taking time to refine engineering studies. The brownfield nature of Eskay Creek, with existing infrastructure, further reduces execution risk.

Currently trading at a significant discount to NAV, Skeena offers potential for substantial share price appreciation as it transitions from developer to producer. Management expects the company to trade closer to 1x NAV in about two and a half years, implying a potential four-fold increase in share price from current levels.

While risks remain, as with any mining project, Skeena's approach to risk mitigation, the quality of its asset, and its fully funded status make it an attractive option for investors seeking exposure to gold. As the company progresses through construction and towards first gold pour, it represents a unique opportunity to invest in a high-grade, large-scale gold project in a tier-one jurisdiction, with strong potential for value creation in the near to medium term.

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Interview with Niël Pretorius, CEO of DRDGOLD Ltd.

Our previous interview: https://www.cruxinvestor.com/posts/drdgold-nysedrd-gold-recovery-land-restoration-dividends-4932

Recording date: 3rd July 2024

DRDGOLD Limited (NYSE:DRD) presents a unique investment opportunity in the gold mining sector, combining profitable gold production with environmental remediation. As a long-standing player in the South African mining industry, DRDGOLD has adapted its business model to address both the challenges and opportunities presented by the country's rich mining history.

The company specializes in recovering gold from mine dumps, focusing on reclaiming and reprocessing tailings scattered across the Witwatersrand basin. This approach not only allows for gold recovery but also contributes to environmental cleanup and land rehabilitation.

DRDGOLD is currently in a transitional phase, moving from its "old Ergo" operations to a new phase of growth. The company has successfully mined out the initial 190 million ton resource at Ergo and is now working on extending the life of mine by an additional 15 years. Simultaneously, DRDGOLD is expanding its Far West Gold Recoveries operation, aiming to double its throughput.

To support this growth, DRDGOLD is making significant capital investments, planning to spend around 70% of its current market capitalization on new infrastructure over the next few years. Importantly, the company intends to fund this primarily through operational cash flows, demonstrating the robustness of its business model.

A key aspect of DRDGOLD's strategy is its focus on sustainable and environmentally friendly mining practices. The company is investing heavily in renewable energy, including a 60 megawatt solar plant and 160 Mwh battery storage system. This not only ensures reliable, affordable electricity but also aligns with the company's goal of achieving carbon neutrality by 2030.

From a financial perspective, DRDGOLD has established a track record of consistent dividend payments, having paid dividends for the past 17 years. The company typically aims for a dividend yield in the range of 3-5%, making it attractive for income-focused investors.

DRDGOLD's profitability is closely tied to the gold price, particularly in South African Rand terms. The company benefits when gold prices are high and the Rand is relatively weak, as it produces in Rand but sells in dollars.

For investors, DRDGOLD offers a unique value proposition. It provides exposure to gold price movements, a consistent dividend income, strong ESG credentials, and potential for future growth. The company's focus on sustainable practices and environmental remediation positions it well in an investment landscape increasingly concerned with ESG factors. While the investment thesis for DRDGOLD is compelling, investors should be aware of certain risks. These include gold price volatility, operational risks associated with tailings reprocessing, potential regulatory changes in South Africa, and execution risks related to the company's growth strategy.

As CEO Neil Pretorius states, "We take away a lot of the tension in investing in a gold stock because we don't dig new holes, we fill existing holes." This encapsulates DRDGOLD's unique position at the intersection of gold mining and environmental remediation.

In conclusion, DRDGOLD represents an interesting opportunity for investors seeking exposure to gold with a sustainable twist. Its unique business model, growth plans, and environmental focus set it apart in the mining sector. However, as with any investment, potential investors should carefully consider the risks and conduct thorough due diligence before making an investment decision.

View DRDGOLD's company profile: https://www.cruxinvestor.com/companies/drdgold-limited

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Interview with Tim Moody, President & CEO of Pan Global Resources Inc.

Our previous interview: https://www.cruxinvestor.com/posts/copper-explorers-aiming-to-fill-the-growing-supply-gap-5598

Recording date: 4th July 2024

Pan Global Resources, a copper exploration company, has recently made a strategic move that could significantly enhance its value proposition for investors. The company has acquired a new high-grade copper property in northern Spain, complementing its existing projects in the southern part of the country.

The acquisition is particularly noteworthy due to the exceptional grades reported from initial sampling. President and CEO Tim Moody revealed that samples from the Profunda site showed copper grades as high as 10.3%, substantially above the global average for copper deposits of around 0.4%. Moreover, the samples indicated significant presence of valuable by-products including cobalt, nickel, silver, and gold, potentially enhancing the project's economics.

This new property has a rich mining history dating back to the 1870s, with major operations running through the 1930s. The historical context provides Pan Global with valuable data to guide their exploration efforts, including underground sampling and mapping information from previous work conducted in 2016.

Currently, Pan Global is conducting a cost-effective reconnaissance program, including a 1000-sample soil survey and detailed geological mapping. The company is utilizing portable XRF technology for rapid, on-site analysis, allowing for efficient initial screening of mineralization. Importantly, this work is being conducted within the company's existing budget, demonstrating prudent financial management.

Near-term catalysts for investors include the results from the ongoing ground exploration work and a planned drilling program. Moody indicated that the company aims to drill one or two holes at the Providencia mine site before year-end, which could provide crucial validation of the high-grade mineralization suggested by surface sampling and historical data.

The timing of this acquisition appears favorable given the macro environment for copper. The global transition to renewable energy and electric vehicles is driving increased demand for copper, with some analysts predicting a significant supply deficit in the coming years. In this context, high-grade deposits like the one Pan Global is exploring become particularly valuable, as they typically allow for lower production costs and higher profit margins.

Moreover, the project's location in Spain, a stable jurisdiction with well-developed infrastructure and a history of mining, adds to its appeal. As geopolitical tensions grow in some traditional copper-producing countries, projects in stable, mining-friendly jurisdictions may command a premium.
While the initial results are promising, it's important for investors to remember that this is still an early-stage exploration project. The planned drilling program will be crucial in confirming the extent and continuity of the high-grade mineralization. However, if Pan Global can successfully delineate a substantial high-grade resource, it could attract attention from major mining companies and potentially lead to significant value creation for shareholders.

In summary, Pan Global Resources' new high-grade copper project in Spain presents an intriguing opportunity for investors interested in the copper sector. The combination of exceptional grades, valuable by-products, favorable jurisdiction, and increasing global copper demand creates a compelling investment thesis. However, as with all early-stage exploration projects, investors should closely monitor the company's progress and consider the associated risks before making investment decisions.

View Pan Global Resources' company profile: https://www.cruxinvestor.com/companies/pan-global-resources

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Interview with David Kelley, President & CEO of Chakana Copper Corp.

Our previous interview: https://www.cruxinvestor.com/posts/copper-explorers-aiming-to-fill-the-growing-supply-gap-5598

Recording date: 3rd July 2024

Chakana Copper, a junior exploration company, is making strides in its pursuit of a significant copper-gold discovery at the Soledad project in Ancash, Peru. Recent scout drilling results from the Mega-Gold target area have confirmed the presence of an extensive hydrothermal system, marking an important milestone in the company's exploration efforts.

CEO David Kelley recently shared insights into the initial findings from the first three holes of an eight-hole program at Mega-Gold. While the market reaction to these results was initially negative due to the absence of immediate high-grade intercepts, Kelley emphasized the significance of the data collected, "We've confirmed our initial thesis. This is a big hydrothermal system. We've got hundreds of meters of pervasive alteration, we're seeing sulfide concentrations up to 10-15%, we're seeing disseminated pyrite and pyrite in multiple different types of veins. Every single hole that we've drilled so far has chalcopyrite and molybdenite." These indicators suggest the potential for a substantial mineral system, with chalcopyrite and molybdenite in every hole drilled so far pointing towards significant copper mineralization.

Investors should understand that early-stage exploration is an iterative process. As Kelley noted, "Exploration is a tricky business. It's very, very, very rare that you come out and just drill your first hole, slam dunk, world-class tier-one discovery." Instead, the company is methodically gathering data to vector towards potentially higher-grade zones within the system.

Chakana is employing advanced exploration techniques to maximize the value of their data. This includes hyperspectral core scanning, which allows for the three-dimensional modelling of mineral assemblages, helping to guide future drilling efforts. The company also integrates geophysical data with drilling results to map sulfide concentrations across the target area.

Looking ahead, investors can anticipate several potential catalysts:
- Results from the remaining five holes of the Mega-Gold drilling program
- Results from three holes drilled at the La Joya target
- Ongoing analysis and interpretation of data, including hyperspectral core scanning results

These results are expected to be released in August and September, providing further insight into the project's potential.

It's important to note that the Soledad project extends beyond the Mega-Gold target. The property hosts numerous breccia pipes, with Chakana having identified 52 targets for testing. This portfolio of targets provides multiple opportunities for discovery and helps mitigate the risk associated with any single target.

For investors with a high risk tolerance and an understanding of the mineral exploration process, Chakana offers exposure to a potentially significant copper-gold discovery. The company's technical approach, multiple exploration targets, and strategic partnership with Gold Fields are positive factors to consider.

As the exploration program progresses, the coming months could prove pivotal in determining the ultimate potential of the Soledad project. Investors should closely monitor upcoming news releases and technical updates as Chakana continues to unravel the geology of this promising copper-gold system in Peru.

View Chakana Copper's company profile: https://www.cruxinvestor.com/companies/chakana-copper

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Interview with Hayden Locke, President & CEO of Marimaca Copper

Our previous interview: https://www.cruxinvestor.com/posts/marimaca-copper-tsxmari-most-advanced-copper-developer-on-the-tsx-5269

Recording date: 1st July 2024

Copper: A Critical Metal for the Global Electrification Push

As the world accelerates its transition towards a sustainable and electrified future, copper has emerged as a critical component in this transformation. The copper market presents compelling opportunities for investors driven by robust demand projections and potential supply constraints.

Marimaca Copper, a company developing the Marimaca oxide copper project in Northern Chile, offers an interesting case study on how junior mining companies are positioning themselves to capitalize on these trends. The company is pursuing a balanced strategy of advancing its flagship project while continuing exploration efforts to potentially expand its resource base.

Hayden Locke, President and CEO of Marimaca Copper, highlights the global nature of copper demand: "The scale of transmission investment, particularly by China but also the rest of the world, is going to be the big driver of demand for copper over the next 5 to 10 years." This demand is underpinned by worldwide efforts to reduce carbon emissions, electrify transportation, and upgrade power grids.

On the supply side, challenges persist. Developing new copper mines is time-consuming and capital-intensive, often taking a decade or more from discovery to production. This dynamic could lead to a supply gap, potentially driving copper prices higher in the coming years. As Locke notes, "The only way it's going to be supplied is if the price goes up."

For companies like Marimaca Copper, this market environment presents opportunities and challenges. The company focuses on completing the definitive feasibility study and permitting process for its main Marimaca project while simultaneously pursuing exploration at its Mercedes site and other targets. This approach aims to create value through potential resource growth while advancing towards production.

Strategic partnerships play a crucial role in the capital-intensive copper mining industry. Marimaca's partnership with Mitsubishi Corp illustrates this, providing financial support and industry expertise. Such relationships can help de-risk projects and improve their chances of successful development.

Investors considering the copper sector should know the potential rewards and risks. While long-term demand projections remain strong, copper prices can be volatile in the short term. Additionally, mining projects face various risks, including potential delays, cost overruns, and geopolitical challenges.

However, the macro thematic supporting copper investment remains compelling. The metal's crucial role in renewable energy, electric vehicles, and grid infrastructure positions it at the heart of the global sustainability push. As Locke emphasizes, "This is a global phenomenon. We're not talking about one jurisdiction, we're talking about every jurisdiction, every developed jurisdiction in tandem, and that will create a wave of demand."

For investors, companies like Marimaca Copper offer exposure to this macro trend. With its balanced approach to exploration and development, strategic partnerships, and focus on a commodity with strong long-term fundamentals, Marimaca represents the opportunity available in the copper sector.

As the world continues its push towards electrification and sustainable development, copper will likely remain a critical component of the global economy, offering potential rewards for well-informed and patient investors.

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Learn more: https://cruxinvestor.com/companies/marimaca-copper

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Interview with Gregory Martyr, Executive Chairman of Capital Markets

Our previous interview: https://www.cruxinvestor.com/posts/capital-metals-aimcmet-major-backing-for-flagship-high-grade-emp-in-sri-lanka-pfs-by-2025-5418

Recording date: 1st July 2024

Capital Metals, a junior mining company focused on mineral sands, is forging ahead with its Eastern Minerals Project in Sri Lanka, despite recent setbacks in securing a strategic partnership. The company's Executive Chairman, Greg Martyr, emphasises that this project stands out as one of the highest-grade undeveloped mineral sands deposits globally, potentially offering significant economic advantages.

The company recently faced a challenge when a planned deal with Sheffield Resources fell through due to market conditions affecting Sheffield's valuation. However, this setback has led Capital Metals to reassess its strategy and focus on demonstrating the project's standalone viability. With $2.8 million USD in cash, the company is well-positioned to advance key development milestones.

A primary focus for Capital Metals is expanding the project's resource base. The current resource estimate, dating from 2016, is based on relatively shallow drilling. The company plans to conduct a new drilling program to depths of 10-14 meters, potentially uncovering significant additional mineralization. Martyr has set an ambitious target of doubling the resource in the short term, which could significantly enhance the project's attractiveness to potential partners or financiers.

Rather than pursuing a large-scale development from the outset, Capital Metals is considering a staged approach. The initial focus would be on producing 550,000 tonnes per year of heavy mineral concentrate, representing the simplest part of the project to implement. This strategy aligns with current market trends and could help manage capital requirements and technical risks.

To fund the initial development phase, Capital Metals is exploring several financing avenues, including vendor finance, offtake financing, and targeted equity raises. The company aims to minimise dilution while securing the necessary funds to advance the project. Martyr believes this combination of financing options could significantly reduce the need for traditional project debt.
Recognising the need for specialised mineral sands expertise, Capital Metals is in discussions with industry professionals to strengthen its operational team. This move aims to bolster investor confidence in the company's ability to execute its development plans effectively.

The mineral sands sector is characterised by a limited number of high-quality development opportunities, potentially enhancing the strategic value of Capital Metals' project. By advancing the project independently, the company aims to strengthen its market position and create optionality for future partnerships or standalone development.

Investors should watch for several key milestones that could serve as catalysts for Capital Metals' valuation, including results from the planned exploration program, appointment of key operational personnel, an updated development plan, permitting progress, and potential offtake or financing agreements.

While the Eastern Minerals Project presents a compelling opportunity, investors should be aware of potential risks, including execution challenges, financing uncertainties, regulatory hurdles in Sri Lanka, market fluctuations, and potential technical issues during development.

In conclusion, Capital Metals offers investors exposure to a high-grade mineral sands project with significant potential for resource expansion and staged development. The company's revised strategy focuses on demonstrating the project's standalone value, which could unlock significant shareholder value if executed successfully. The coming months will be crucial as Capital Metals works to turn its confidence into tangible progress, potentially rewarding investors who recognise the opportunity at this pivotal juncture.

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Learn more: https://cruxinvestor.com/companies/capital-metals

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Interview with Andrew Williams, President and CEO of New Pacific Metals

Our previous interview: https://www.cruxinvestor.com/posts/new-pacific-metals-nuag-advancing-2-large-bolivian-ag-au-projects-3092

Recording date: 28th June 2024

New Pacific Metals (TSX:NUAG) is emerging as a compelling player in the silver mining sector, with two significant discoveries in Bolivia that are attracting attention from investors and industry experts. The company's flagship Silver Sand project has recently reached a crucial milestone with the publication of its pre-feasibility study (PFS), while its second project, Carangas, is advancing towards a preliminary economic assessment (PEA).

The Silver Sand project's PFS results are particularly noteworthy, showcasing robust economics that position it as one of the world's premier undeveloped precious metals projects. With an after-tax Net Present Value of $740 million at $24 silver, a 37% Internal Rate of Return (IRR), and a payback period under two years, Silver Sand demonstrates significant potential for value creation. The project's NPV to initial capital expenditure ratio of over 2 further underscores its attractiveness.

New Pacific's second discovery, the Carangas project, adds another dimension to the company's growth potential. With a PEA expected in the coming months, Carangas could potentially unveil another significant silver asset, further enhancing the company's resource base.

One of New Pacific's key strengths lies in its strategic backing. The company boasts strong support from major players in the silver mining industry, with Silver Corp holding a 27% stake and Pan American Silver owning just under 12%. This backing not only provides financial support but also lends credibility to New Pacific's projects and approach.

Operating in Bolivia presents both opportunities and challenges. While the country has a rich mining history, it hasn't seen a new large-scale open-pit mine permitted in some time. New Pacific has taken a strategic approach by employing a 100% Bolivian team for its in-country operations, complemented by experienced expats and Vancouver-based management. This structure effectively balances local knowledge with international mining expertise.

The silver market outlook provides an attractive backdrop for New Pacific's projects. Silver demand is driven by both investment and growing industrial applications, particularly in sectors such as photovoltaics and electric vehicles. The supply side is constrained, as 75% of silver is produced as a byproduct of other metals, potentially setting the stage for significant price movements if demand outpaces supply growth.

From a financial perspective, New Pacific is well-positioned with approximately US$15 million expected in cash reserves by the end of the year. This runway provides the company with flexibility to continue advancing its projects without immediate financing pressure.

For investors, New Pacific Metals offers exposure to two high-quality silver assets in a jurisdiction that, while challenging, offers potential for lower costs and less competition. The company's strong backing, experienced management, and advancing projects make it an attractive option for those seeking exposure to the silver market.

However, investors should be mindful of the risks associated with mine development in Bolivia and the inherent volatility of the silver market. As with any mining investment, careful due diligence is essential. Potential investors should closely monitor progress on permitting, stakeholder engagement, and project advancement, as well as broader trends in the silver market.

View New Pacific Metals' company profile: https://www.cruxinvestor.com/companies/newpacificmetals

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Interview with Dan Noone, CEO of G2 Goldfields Inc.

Our previous interview: https://www.cruxinvestor.com/posts/g2-goldfields-tsxvgtwo-high-grade-gold-resource-growth-update-in-mining-friendly-guyana-5247

Recording date: 28th June 2024

G2 Goldfields (TSXV:GTWO) is emerging as a compelling investment opportunity in the gold exploration sector, with its flagship project in Guyana's Cuyuni Basin showcasing significant high-grade potential and district-scale opportunities.

The company's current resource stands at 2 million ounces, comprising two main deposits:
Oko Main Zone with 1.2 million ounces of gold at an impressive grade of 9 grams per tonne (g/t) and Ghanie Deposit with 800,000 ounces at 2 g/t gold.

Recent drilling results have been encouraging, with intersections of 10 meters at 9.7 g/t gold and 52 meters at 2 g/t gold reported outside the existing resource envelope. These results underscore the potential for significant resource expansion.

G2 Goldfields controls approximately 20 kilometers of strike length along the prospective gold trend, providing numerous opportunities for further discoveries. The company is actively exploring this extensive land package, with ongoing drilling at Ghanie and Oko Northwest, as well as regional exploration along the trend.

CEO Dan Noone highlights the district's historical significance: "The discovery was 150 years ago in the 1770s Gold Rush. This area in the Cuyuni Basin has clearly been known as a gold district for a long time."

Investors should note several key catalysts on the horizon:
Resource Expansion: G2 aims to at least double the size of the Ghanie deposit by year-end.
New Discovery Potential: Drilling at Oko Northwest has identified multiple high-grade zones.
Updated Mineral Resource Estimate: Planned for Q1 2025, incorporating ongoing drilling results.
Regional Exploration: Continued exploration along the 20-kilometer trend could yield new discoveries.

The company's market capitalization has grown significantly, from approximately $4 million in 2019 to nearly C$300 million today. This growth reflects the market's recognition of G2's exploration success and the growing scale of its gold resource.

Looking ahead, G2 Goldfields is considering various development scenarios, including potential collaboration with neighboring projects to maximize the district's value. This strategic approach could provide additional upside for investors.

The broader gold market context is also favorable, with prices remaining strong above $2,300 per ounce. However, Noone observes a disconnect between gold prices and gold equities, potentially presenting an opportunity for investors.

While G2 Goldfields offers significant potential, investors should be aware of the risks associated with junior mining companies, including exploration risk, financing requirements, and commodity price fluctuations.

In conclusion, G2 Goldfields presents an intriguing opportunity for investors seeking exposure to a high-grade gold exploration story with district-scale potential. The company's combination of existing resources, exploration success, and strategic positioning in a renowned gold district makes it a noteworthy option in the gold sector. As always, investors should carefully consider their risk tolerance and portfolio allocation when evaluating an investment in G2 Goldfields.

View G2 Goldfields' company profile: https://www.cruxinvestor.com/companies/g2-goldfields

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