Maurice Jackson: Joining us for a conversation is Greg Johnson, the CEO of Metallic Minerals Corp. (MMG:TSX.V; MMNGF:OTCMKTS).
Sir, we are thrilled to have you back as Metallic Minerals has several exciting developments to provide shareholders. Before we begin, Mr. Johnson, please introduce us to Metallic Minerals and the opportunity the company presents to shareholders.
Greg Johnson: Metallic Minerals is a silver-focused exploration and development stage company. We are a member of the Metallic Group of Companies. Many of us were part of the original founding of NovaGold. The group is backed by renowned resource investors, such as Eric Sprott. We started putting together the Metallic Group at the bottom of the metal price cycle. Our focus was on brownfields, past-producing, high-potential districts with MMG being focused on silver. Over the past five years, we've acquired and explored three exceptional assets, including our flagship Keno Silver Project, the La Plata Project and our Klondike Royalty Portfolio.
Maurice Jackson: Speaking of Colorado, sir, take us onsite to the La Plata Silver-Gold-Copper Project located just outside of Durango, as Metallic Minerals has just announced the commencement of its initial drill campaign on the La Plata, which is the first significant exploration in over 50 years in the historical high-grade La Plata Mining District. Before we get into the press release, Mr. Johnson, please acquaint us more with the La Plata Project and the value proposition before us.
Greg Johnson: So we're pretty excited about this. We see this as an amazing opportunity. The La Plata Project is a high-grade silver and gold district originally discovered in the 1700s with over 90 different mines and prospects that were developed from the 1800s to about the 1940s, all of these producing bonanza-grade silver and gold. Major miners, such as Rio Tinto and Freeport, have come into the district in the 1950s, recognizing the bulk-tonnage potential in the central part of this precious metals–rich porphyry system. This system is a lot like the Galore Creek Project that was operated by NovaGold—and our team was part of driving the success—that was recently sold to Teck and Newmont. Our team is particularly excited about applying our new modern toolkit to this opportunity in this historical high-grade district.
Maurice Jackson: Metallic Minerals is embarking on phase one of your 2021 drill program on the La Plata, which will be 2,000 meters of diamond drilling on the central porphyry, which hosts the historical resource. What is the goal for this campaign? And can you talk about the historical resource and what it looks like?
Greg Johnson: This is the first drill campaign on this project in, as you said, nearly 50 years. It's designed to confirm the historical drill work on the project, which is only in the central porphyry system, and particularly the precious metal values, which were historically under-sampled. With 54 historical drill holes comprising nearly 15,000 meters of drilling, we see the potential here at La Plata to rapidly advance the system to a modern 43-101 resource. That historical resource indicates that we have the potential for a multi-billion-pound copper system with tens of millions of ounces of silver. And that historical resource doesn't include any of the work surrounding the area in the high-grade epithermal silver-gold structures that were the focus of historical mining.
Maurice Jackson: How will Metallic Minerals measure success for this drill program and when can the market expect results?
Greg Johnson: What we're looking for here is to confirm the past work, which was done by really high-quality players like Rio Tinto and Freeport, with the potential to be able to not only show what they did, but to build on that and show significant expansion. We should start to see results coming out over the next couple of months with continued 3D modeling going into the fall with an objective, ultimately, of delivering an inaugural 43-101 resource on this project.
Maurice Jackson: Leaving Colorado, let's visit Metallic Minerals' flagship Keno Silver Project, which is adjacent to Alexco Resources, located in the historical silver-rich Keno Silver District of the Yukon in Canada. Back in April, Metallic Minerals announced a high-grade silver intersect with 4.1 meters resulting in 2,536 grams per tonne silver equivalent. That has now been followed up with a 10,000-meter drill program. How are things coming along and are there any updates that you can pass along to us?
Greg Johnson: This is an exciting program. Our exploration program kicked off this year in June with the first drill. We're looking to add a second here. This is going to be one of our largest programs to date on the Keno Silver Project with 10,000 meters planned on multiple targets and following up on the success from last year. In addition, we're running a deep IP geophysical survey across the large targets on the eastern part of the district, which could start to give us a sense of scale and potential on those discoveries from last year's program.
That historical resource indicates that we have the potential for a multi-billion pound copper system with tens of millions of ounces of silver. And that historic resource doesn't include any of the work surrounding the area in the high-grade epithermal silver-gold structures that were the focus of historical mining.
Maurice Jackson: When can we expect results from the drill program and what will determine success?
Greg Johnson: Results should start coming out any time and continue over the next several months and well into the fall. What we're hoping to do here is to build and expand on the areas we've already identified mineralization, both in terms of the high-grade systems and the bulk tonnage, and to continue to build towards that inaugural resource estimate for the project.
Maurice Jackson: Finally, let's discuss the highly innovative Klondike alluvial gold properties in the Yukon. Do you have any updates there?
Greg Johnson: We were pleased actually to see significant progress on the Alluvial Gold Portfolio. This is in the historical Klondike Gold Fields, which produced over 20 million ounces historically. And today that production is from these large-scale, modern open-pit operations. We've had major drill campaigns completed by a couple of our operators this spring and going into the summer. The next steps here are the initiation of bulk-sample processing, which is like test mining of the ground. And from that work, we could potentially see two or three of the blocks advance quickly to commercial gold production, including the potential for the first significant production royalties to Metallic Minerals this year from gold produced on those projects.
Maurice Jackson: Oh, that sounds exciting. All right. Leaving the project sites, what is the next significant milestone for Metallic Minerals?
Greg Johnson: With three active programs, we've got a lot of activity that I would expect to see strong news flow coming from each of the projects. Each one of them has kind of its milestones, but drilling, geophysical results, and then, ultimately, culminating in initial resource estimates and potentially gold production from the Alluvial Portfolio.
Maurice Jackson: Let's look at some numbers. Sir, please provide us the capital structure for Metallic Minerals.
Greg Johnson: The company is well structured. 126 million shares outstanding. No debt. Got about $6 million in cash and significant in-the-money warrants that could bring in as much as another $12 million for the next year. We're well positioned to carry out this year's program and we're well positioned into 2022 for follow-up programs.
Maurice Jackson: In closing, Mr. Johnson, what would you like to say to shareholders?
Greg Johnson: I think it's worth talking about the current markets for precious metals and particularly how it fits in with the historical seasonality for the sector. We believe that a major bottom in the commodity and precious metal sector was put in in that 2016 to 2020 period and that we're now in the very early stages of a multi-year commodity cycle. I believe it has the potential to eclipse the last cycle that ran from 2001 to 2011. Typically, during these decade-long cycles, we're going to get extended, healthy consolidations that can take significant periods to resolve. Gold and silver equities have been consolidating since August of last year. On top of that, we're currently in what's typically the weakest seasonal period for silver and gold with the strongest period generally starting in the fall.
The next steps here are the initiation of bulk-sample processing, which is like test mining of the ground. And from that work, we could potentially see two or three of the blocks advance quickly to commercial gold production, including the potential for the first significant production royalties to Metallic Minerals this year from gold produced on those projects.
Greg Johnson: I think this presents an opportunity for astute investors to be picking up shares of high-quality, precious metal companies at terrific values. With such long recent consolidations, but such very bullish fundamentals, I think we're winding the spring here for a very bullish period ahead with likely another five to ten years of bull markets still to come. I should mention that with over 30,000 meters of drilling underway in the three Metallic Group of Companies, this gives investors exceptional exposure to silver, battery metals and copper in what is looking to be an exceptional time in the marketplace for people to be picking up value in our group.
Maurice Jackson: Mr. Johnson, last question and that is, what did I forget to ask?
Greg Johnson: I think this has been an amazingly comprehensive coverage and interview. I would recommend that if investors have questions that they go to our website, which is mmgsilver.com, or give us a call at the numbers listed on that website. We're happy always to talk with investors and to answer questions.
Maurice Jackson: Mr. Johnson, it has been a pleasure speaking with you. Wishing you and Metallic Minerals the absolute best, sir.
Greg Johnson: Thanks a lot. Been a pleasure to be back with you.
Maurice Jackson: And as a reminder, I am a licensed representative to buy and sell precious metals through Miles Franklin Precious Metals Investments, where we have several options to expand your precious metals portfolio, from physical delivery of gold, silver, platinum, palladium, and rhodium, to offshore depositories, and precious metals IRAs. Give me a call at 855.505.1900 or you may email: [email protected]. Finally, please subscribe to www.provenandprobable.com, where we provide Mining Insights and Bullion Sales, subscription is free.
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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