Magna Gold (TSX-V: MGR) CEO Arturo Bonillas on the Goal of 1 Million Ounces as Exploration Activities Kick Off at the Mercedes Gold Project

July 12, 2019

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Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the President and CEO of Magna Gold (TSX-V: MGR), Mr Arturo Bonillas. Arturo, buenos tardes. How are you, sir?

Arturo Bonillas: Buenos tardes, Gerardo. I'm very well. Thank you very much. How are you?

Gerardo Del Real: I am excellent. It's always great to speak with someone who can pronounce my name in Spanish, Gerardo of course.The name my mother and father gave me.

Exciting times. We have gold above $1,400. I believe we are in the first inning of a gold bull market. That's a baseball analogy, I'm going to use a basketball one. The last time you and I spoke, I called you the Michael Jordan of monetizing and putting deposits into production. You're five for your last five.

The Mercedes Gold property in Sonora, Mexico is the attempt for number six. And as I said off the top here, it's exciting because you've initiated exploration activities on the Mercedes Gold property in Mexico. Can you provide some details, Arturo?

Arturo Bonillas: Of course, that is correct. We began our exploration program precisely on June 17th. We expect to conclude this program around the second week in August, including about 2,500 meters of drilling. We should have a report and results of this first phase, as we're calling it, the first week in September. We are into the program on time and we have already built around 5 kilometers of access roads, including 10 drill sites.

We are also accessing new targets. We are building roads towards some old mines that we found there. In addition, we are mapping a very large area, around 500 hectares, doing geological mapping and geochemistry to identify future targets. We have completed already around 20 hectares of the geological mapping and things are going very well, very smooth.

Gerardo Del Real: Excellent.

Arturo Bonillas: I have been very happy with what's happening there.

Gerardo Del Real: Fantastic. Arturo, I understand – and let's be clear again for people that are new to the Magna story – the goal of the Mercedes property is to quickly get to a million ounce resource of oxidized, near-surface, economic gold ounces. Is that correct, Arturo?

Arturo Bonillas: That is correct and I like fast tracking things in exploration. We have, on this first day of exploration, we want to confirm the part of the ore body that we know best and we will do that with drilling. Concurrently, we want to have additional drill targets to extend our areas of exploration. If we find in our work that we can begin producing in certain areas, we will do it. I think that we don't need a lot of ounces in the ground there because the cost will be so low to begin production at a small scale and begin generating cashflows. So that's the plan.

Gerardo Del Real: The reason that it's easier to go into production and why the economics are going to be favorable if you reach your goal of a million ounces is because of the great infrastructure. Right?

Arturo Bonillas: That's correct. Various factors are involved. One is the ore body is on surface, it's highly leachable and the rock is quite soft. That's in regards to the geology. And the infrastructure is amazing. The access is by highway as I mentioned before. There's a power line going through there and that will become a very important mining district. I think already it is. You don't need a lot of capital for that type of heap leach process and the operating costs will be low.

We are highly experienced in other more difficult areas, so we are very confident that we'll be putting something in production there. Hopefully after we finish our first phase of drilling, we will have a good idea of what's next.

Gerardo Del Real: You know, it's incredible to me. There are so many companies that just sit around for years and years and years. They collect paychecks. They never advance a project. It's incredible to me that you just went public. You're weeks away from getting an over the counter listing here in the US. You have a very modest, modest budget of approximately $450,000 US on this first phase of exploration. And you believe at the end of this phase, this first phase, you'll be in a position to make a decision looking towards production in the near future.

Arturo Bonillas: That is correct. At the end of this first phase, we will focus again our activities. Certainly we have to do more drilling and we have done some metallurgy already on the surface sample that we've taken with excellent results with very, very high recoveries. So by the end of this first phase, we want to go into a second phase, aimed now at determining how and when we will be able to produce.

Also as you mentioned, we will be a trading on the OTC markets in the US. We began the process two weeks ago. I think three or four weeks more and that will be very important for our US investors. So that's exciting, also.

Gerardo Del Real: Fantastic. Arturo, I look forward to news. I know that drilling commences, I believe here in the next 10 days or so, and of course you and I had talked about me visiting the property hopefully in late July, early August. So let's hope that that happens and I happen to be there as the drill is turning.

Arturo Bonillas: Of course. That will be great. The rigs are supposed to arrive on July 21st and start drilling right away. So for sure, you will be there. I hope you can come so you can see the drills turning. It's all very exciting.

Gerardo Del Real: Fantastic. Arturo, thank you so much. I appreciate the time. I look forward to chatting again soon.

Arturo Bonillas: Thank you, Gerardo. It's always a pleasure.

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