Maurice Jackson: Joining us for a conversation is Tim Johnson, the CEO of Granite Creek Copper Ltd. (GCX:TSX.V; GCXXF:OTC).
Mr. Johnson, a lot of moving pieces here all going in the right direction for Granite Creek Copper. Let's get right into it. Sir, Granite Creek is now exploring the combined land package at Carmacks and Carmacks North. How has the addition of the Carmacks project changed the company?
Tim Johnson: Well, I can go back to really the company's inception and that was January of 2019. And so what's happened within 24 months, we've gone from what could have been considered an early stage exploration play to a resource company with significant resources. And we're working hard on developing a plan to aggressively grow those resources in the coming months.
Maurice Jackson: Granite Creek Copper's recent success usually takes years to accomplish. The company recently published some drill results. Can you provide us with some context on those?
Tim Johnson: Well, what we've been telling the market before we drilled, that once we combined the two properties we were going to focus on the sulfide potential at Carmacks, and then on the adjacent property, the Stu property, which we've now renamed Carmacks North. Just both the sulfide and oxide potential. Our drill campaign proved up that scenario. It was a bit of a "Proof of Concept" for us. We drilled 127 meters of 0.85% equivalent at Carmacks, and that was primarily sulfide. That shows the sulfide potential that not only some of it underlying the overlying oxide, but also some of it very near to the surface.
And then at the adjacent Carmacks North property, we intercepted some pretty high-grade material up to 4.5% copper, over narrower widths, 4 meters. But we also hit a 0.95 over 25 meters. And that was mostly oxide. GCX has been able, in a very small program, to show that we can grow both the oxide and sulfide resources. And now that we've got some great targets that are being developed for the 2021 field season.
Maurice Jackson: Another demonstration of the proof of concept here. Share with us, what's the size of the Carmacks, because many of us are familiar with this formerly known as the Stu, the Carmacks North, but talk to us about the size of the Carmacks deposit.
Tim Johnson: The Measured and Indicated resources, as developed by previous operators, we didn't drill these off and this is from a 2017 43-101 report, is just under 24 million tons of 0.85% copper. And then it's got some good precious metal credits that go with it. And when you add the precious metal credits, on a copper equivalent basis, we're looking at about 1.3% copper.
Maurice Jackson: Let's look at some compare and contrast. How does the granite Creek Copper story compare with your peers right now, as far as valuation?
Tim Johnson: Well, that's an interesting and very difficult question to answer. There aren't very many copper peers at the stage that we're at, meaning a company with resources and looking to expand. And relatively high grade. Speculators may find some large low-grade deposits in hundreds of millions of tons, but something that's in and around a percent or better is very difficult to find. We see projects with similar tonnage. There are a few of them out, you'll get anywhere from 5 to 15, 16 cents per pound of contained copper. Reflected in those companies share prices. We're sitting right around 5 right now. So we think there's lots of room. Once the market recognizes our contained metal and we're able to add resources, we think there's lots of room for the share price to grow on that basis alone.
Maurice Jackson: Mr. Johnson, you're not alone as far as recognizing the value proposition, the company just announced a financing. How did the market respond?
Tim Johnson: Well, the market responded very well. Within hours of announcing the financing, our book was almost full. And we look to it to expand that financing but we're cautious as to dilution and we don't want to issue too many shares until we've had the opportunity to show that we can grow those resources. And what the subsequent expansion would be.
Maurice Jackson: Speaking of growth, how do you plan to grow the resource?
Tim Johnson: Well, we're currently planning between an 8,000- and 10,000-meter drill program for our 2021 field season. And we are going to be targeting probably about 80% of that drill program will be focused on resource expansion. So we've got a lot of actually what we consider low-hanging fruit, in that the targets have been developed. They're near step-outs from some pretty high historical drilling. And we've got all the data from the previous operators who left some un-drilled targets as they were leaving the property.
Maurice Jackson: When can investors expect to see news and what's in store for 2021?
Tim Johnson: Our primary focus as we move into the field season will be resource expansion, resource expansion, resource expansion. So you can look for announcements on what those programs might be in the coming weeks. And then you can look for announcements of the drill program. And as we put those announcements out about what the drill program is going to look like, we'll be including figures that show the size and scope of the deposit. The areas that are open and try to relay what some of our plans are going to be. And then our goal in either the fourth quarter of this year or the first quarter of next is to publish an updated resource on the back of those drilling results.
Maurice Jackson: You touched on this earlier, the current resource consists largely of oxide material. How does that composition factor in versus the sulfide and what percentage do you see as the ultimate resource being of each?
Tim Johnson: Based on the 2017 Preliminary Economic Assessment done by the previous operator, it's about two-thirds oxide, one-third sulfide, and that gives you a total contained about 440 million pounds of contained copper. We think that the underlying sulfide at Carmacks could be two to three times larger and that's not including our adjacent Carmacks North property yet that we've added to the land package. Speculators may see a lot of blue sky here.
There are some compelling targets on the Carmacks North that we do have to do some more work on before we're able to drill those. Meanwhile, at the Carmacks proper, we have got a lot of sulfide potential that we can drill off. And that's, again, that's going to be our focus primarily in this 2021 field season.
Maurice Jackson: Given the different processing for oxide versus sulfide. What are the options or early plans there?
Tim Johnson: Well, we're exploring multiple paths to development. The previous operators, again had contemplated about a nine-year mine life and the oxide only. At 2016, 2017 prices that was a four-year payback. We didn't see that as economic. The answer of development will be answered once we've completed growing those resources.
For instance, if we grew the oxide resources to the point where we had a 15-year mine, it would make sense to execute on building that out. I should note, that there's also a sulfide mill in the district owned by Minto Mines to the north of us, about 35 kilometers away. So there is a possible scenario where that might be utilized. I know they are working hard to get that running at full capacity and are exploring themselves at their mine site. So whether there's any capacity there in the future, it's unknown but the point is that there is an operating sulfide mill in the district. And I think that that bodes well for future consolidation of the district if we can attract the type of developer who would want to see that put together.
Maurice Jackson: Speaking of the Minto Mine, there are some shared synergies potentially here as you referenced just a second ago, but how about transportation and infrastructure there?
Tim Johnson: Yeah, I think when you look at the district as a whole, and we do at the Minto copper district, I think you have to consider what's the best path of development. I mean, currently, at Minto, they deliver their concentrate across the Yukon River by barge and ice road. So there are times when they can't deliver the concentrate. There's a possibility of building access down through our property that would exclude that barge in ice road. I think it is possible some synergies there, and I think more to the point is that our goal is to attract a larger copper producer to the belt. When you look at the entire Minto copper belt as a whole, I think is a very compelling place to be looking for further investment and further copper development.
Maurice Jackson: Switching gears, sir, please provide us with an update on the capital structure for Granite Creek Copper.
Tim Johnson: We have currently 96 million shares issued outstanding. It's 150 million on a fully diluted basis. We've got about 8 million warrants in the money that would bring in just over a million dollars should those be exercised. Currently about $700,000 cash on hand. Financing should close fairly soon here. The company is cashed up for our 2021 field season.
Maurice Jackson: In closing, sir, what keeps you up at night that we don't know about?
Tim Johnson: Just how we're going to handle all the logistics of the aggressive program that we're going to work on. We've got some great people on our team. It's an exciting time to be in the copper space. And we've got to roll up our sleeves and get the work done but we're confident we can do it.
Maurice Jackson: Last question. What did I forget to ask?
Tim Johnson: You know, I think you covered the story very well. I invite listeners to our website at www.gcxcopper.com, add our symbols to your watch list, and follow along, and hopefully, we're going to have some good results for people to enjoy.
Maurice Jackson: I'm looking forward to it, sir. Mr. Johnson, always a pleasure to speak with you, wishing you and Granite Creek Copper, the absolute best, sir.
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