Exclusive Interview: Gold Miner CEO Lands Major Investment

Written by Gerardo Del Real
Posted February 12, 2018 at 2:25PM

Publisher's Note: Today we're going to bring you an interview with our junior mining expert and editor of Junior Mining Monthly and Junior Mining Trader, Gerardo Del Real, recently landed with the Chairman and CEO of Mawson Resources (TSX: MAW), Mr. Michael Hudson.

The best companies in the junior mining space are always on the radar of major companies, and Mr. Hudson and Mawson Resources just landed a big investment from one of the largest, Goldcorp Inc. (NYSE: GG).

This is just about the biggest vote of confidence from industry insiders you'll find in an exploration-focused company. Read on for more details.

To your wealth,

Nick Hodge Signature

Nick Hodge
Publisher, Outsider Club


Gerardo Del Real: This is Gerardo Del Real with the Outsider Club. Joining me today is Chairman and CEO of Mawson Resources, Mr. Michael Hudson. Mike, how are you this afternoon?

Michael Hudson: I'm exceedingly well, thanks Gerardo, down under on a morning in front of you.

Gerardo Del Real: Well big congratulations. You had some huge news this morning. I featured and spoke in regards to the district-scale land package that Mawson has. I've said in the past that there's literally more gold there than you know what to do with. The gold is everywhere, and Goldcorp today kind of shared... I believe they came in with a big vote of confidence, and it likely agrees because they've announced that they are now a strategic investor to the tune of 8.1 million dollars. So congratulations, Mike.

Michael Hudson: Thanks, Gerardo. It's a great validation for the project, as you say, and equally for the team that we've got on the ground in Finland there.

Gerardo Del Real: Let's talk about the property for those that aren't familiar with it. Now when a company like Goldcorp comes in, it's an acknowledgment of a couple of things. One is the scale and the potential, of course.

But the second is, I think it's an acknowledgement — and I think it's going to pick up here in 2018 — that mid-tiers and majors need to replace their depleting reserves, and I think companies are going to start taking strategic investments in companies like Mawson that have multiple targets, that have gold everywhere, that have district-scale land packages.

Can we talk about the property for those that may not be familiar with the Mawson story?

Michael Hudson: Sure Gerardo. It is very much the case that it's becoming a lot harder in the world to replace the resources that are being mined, and these associations are critical for the majors, and it's generally the juniors that make these discoveries, and then the majors basically create optionality by coming in at an equity level, and becoming major partners in these businesses, so we're very happy to have the world's largest gold mining company on various different metrics come in and validate the project.

So the project is large. It is a 16,000 hectare property, 100% owned by us.

We made the discovery back five or six years ago, and it's been developing over that period. Really this is the first time since the discovery was made that we're in a better market over the last year, and the first major program, drill program went in last year, so it's relatively early days, but we found gold over 100 square kilometers.

We've got a variety of different systems. We've got nuggety vein systems, which we're not focusing on, but have produced actually the best hole in Finland's history on a grade meter width, 6 meters at 617 grams was our 11th hole on the property.

And then eight kilometers away, we've been focusing at an area called Rajapalot. There's a lot of different projects over this large area, and it's somewhat challenging to come and get your head around all the different names, Finnish names on the property. And there we've been drilling over an area of four by three kilometers. We've got three rigs there drilling at the moment.

45% of the drill holes hit significant gold in the last program, and we're following up this year with a much bigger program of 15 kilometers this winter.

Gerardo Del Real: Now you mentioned the drilling, Mike, and for those again that are not familiar with the Mawson story, you mentioned being in a better gold market, and you mentioned that you're drilling now. Now you were recently granted permits that have allowed you to drill some of the more important targets. Is that correct?

Michael Hudson: Well, we were renewed on important areas, which is always important, and the permitting on this project, up until about two or three years ago was challenging. It was quite slow, so during the downturn we put a lot of effort into making sure we did the right things on the ground, and now we're seeing the benefits of that with full permits to execute.

Gerardo Del Real: Now let's talk about the investment from Goldcorp. It's 8.1 million dollars. Can you go over the details for us?

Michael Hudson: It's simply that. It puts Goldcorp at approximately 13% on an undiluted basis, so they become one of our major shareholders, the second largest shareholder after the private equity group, Sentient.

We also have large endowment funds out of the U.S. as significant shareholders, so Mawson is a very tightly held stock. About 60% before this investment was held by major shareholders. I haven't done the exact numbers, but of course it's north of that, so we've got the big players in there already, which is a bit of a reverse engineering in a way.

A lot of the big players have come in early to this project, because they recognize the potential.

Gerardo Del Real: Absolutely. Now we talked about the 8.1 million dollar investment from Goldcorp. You had recently completed a private placement. What does the cash position look like now? I know that Goldcorp had to have asked you what are you going to do with all that cash?

Michael Hudson: We're around $16 million Canadian in the bank today, which is really important. I mean, it's not just sitting on a cash kitty like that, but we basically got the money to execute now without having to go back to the market, and it's very important in exploration to back the technical people on the ground.

Some of the worst outcomes in exploration are when you turn dollars on and off, as the markets go up and down, because the only way truly to succeed in exploration is to back those technical people, and give it the best shot in drilling.

That's exactly what we can do now, and companies that have those cash kitties to execute are very well rewarded in this space, and we've got ourselves in that position very fortunately, and I'm very grateful to have got the company to that position today.

So, it's a drill exercise. We're drilling 15 kilometers minimum. This winter we'll probably bring another rig in now with these additional funds, and then we'll continue drilling in summer. About 80% of our property we can drill during summer where it's not so wet, or where we only have permits to drill on snow cover.

So about 80% of the area in earlier-stage projects will be tested during summer, and then we'll go back again with a big drill program, predicated on success, of course, continuing next winter. So basically we've got the next two winters and summer with very aggressive drill programs sorted.

Gerardo Del Real: Wonderful. Now, are you looking to establish a maiden resource on any of these potential deposits? Is that a part of the plan, Mike?

Michael Hudson: About 50% of the drilling this year is dedicated to known gold prospects within the project area. So we have four areas that we're looking to put resources around, and then the 50% of the program — drill program — is budgeted to looking at the other 95% of the mineralized horizon, the target horizon that we haven't tested to date.

So, we're aiming to do that, and we'll be predicated on successive drilling and continuity of gold, and finding something significant enough to put out a maiden resource. That's also a key, because we don't want to put out anything that will limit the vision of the project, so certainly it's the aim. Whether it happens this winter or next winter, we'll see.

Gerardo Del Real: Mike, congratulations again. Is there anything else that you'd like to add?

Michael Hudson: No, I think we've hit the key points. Great validation of the projects by one of the world's largest gold companies, and of the people on the team to execute, and the company's better position than it's ever been in its history.

Gerardo Del Real: Well, it's an incredible exploration project. I'm looking forward to following the story throughout the year, and of course a lot of drilling, so that means a lot of news flow. Should be an exciting time for shareholders.

Michael Hudson: We look forward to delivering.

Gerardo Del Real: Thank you, Mike.

Michael Hudson: Thanks, Gerardo.


For the past decade, Gerardo Del Real has worked behind-the-scenes providing research, due diligence and advice to large institutional players, fund managers, newsletter writers and some of the most active high net worth investors in the resource space. Now, he is bringing his extensive experience to the public through Outsider Club, Junior Mining Monthly, and Junior Mining Trader. For more about Gerardo, check out his editor page.

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