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Introducing Mawson Resources (TSX: MAW): High-Grade Scandinavian Gold with Strong Financial Backing

December 6, 2016

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is chairman and CEO of Mawson Resources (TSX: MAW)(OTC: MWSNF), Mr. Michael Hudson. Michael is an entrepreneur with over 25 years developing and financing mineral exploration properties. Michael has managed and developed exploration to pre-feasibility projects in Pakistan, Australia, Peru, Argentina, Mexico, Finland, Spain, Portugal, and Sweden for major and junior mining companies. Mawson Resources is a leading Nordic exploration company with a focus on gold discoveries in Finland. The company has a large district scale land package in arctic Finland with high-grade gold from surface and most recently received a court decision that will allow the company to explore what may be the most prospective targets. Michael, thank you very much for joining me today.

 

Michael Hudson: Gerardo, it's a pleasure.

 

Gerardo Del Real: I provided a brief intro there, but for those that aren't familiar with you, Michael, can you please share with us a bit more about your background and how you got involved with Mawson Resources?

 

Michael Hudson:  I'm a geologist, so very hands on, technically driven person. Back in the late 90s, I spent a dozen or so years in the majors and had the entrepreneurial bug, and I had some links, despite this Australian accent, to the Canadian markets. That's where my life took a turn, and I started developing projects and then bringing them into the public domain. Mawson was the first company we put it together in 2003, and it went public in 2004 on gold projects in Sweden.  The Company has had a long and varied history, but a very long learning process through Scandinavia. The projects we are dealing with today are a result of all that time, energy, learning and getting to a point where you find the best projects in the district.

 

Gerardo Del Real: Excellent, now I mentioned that you've been involved in developing and financing mineral exploration properties for over two decades. Obviously, success in the resource space starts with having the right people. Mawson has put together a very distinguished group. Can you provide some background on some of the key people involved with Mawson?

 

Michael Hudson: Everything we do in life, I think, is about people, from marriages to business to mineral exploration. Even though we often think it is all about the rocks in exploration, it is really about the people on so many different levels. No doubt, you must have the great rocks, but the right people need to be around those great rocks. At every level I'm very proud to say that we have some wonderful people associated with the company. From a technical level, we have the grandfather of gold exploration in Finland, whose is our Chief Geologist in Finland. He has had his hands on 10 million ounces of Finnish gold discoveries. His name is Erkki Vanhanen. The President of Mawson and responsible for the day to day operations, is Dr. Nick Cook who I've worked with for 25 years.  Nick is a very strong, technical and hands on explorationist. You can take it up through the Board level with people who are my mentors, mine developers and great entrepreneurs. This extends right through to the shareholder base.  We are very fortunate to have some very strong shareholders. Sixty percent of Mawson is held by solid private equity money, led by The Sentient Group who have supported Mawson for five years.  We also have three very large US University endowment funds which takes us close 60% holding. Insiders have six percent stake, so still have skin in the game. 

It is really a mix at so many different levels of just having the right people, support and sharing the same values to try to achieve the right outcome.

 

Gerardo Del Real: Absolutely. I'd like to talk about the land package because it truly is district scale. The property is in arctic Finland, and as I mentioned, you recently received a favorable court decision that now allows for access to very important targets. Can you provide an overview of the land package and why obtaining access to these targets was so important?

Michael Hudson: That's the second part. If you have the right people, you've got to have the right rocks as well. Finland opened up for foreign companies to obtain greater than 50% ownership when they joined the EU in the early 1990's. It's a relatively recent history. The rocks are the right age. Analogues of the largest gold deposits around the world are in these rocks. The belt of rocks is prospective, elephant country. To the north of us, Agnico Eagle have an eight million ounce gold system at Kittila that's been developed since those days that Finland opened up. It is important to understand that 99% of the Finland is under glacial till cover. Now that's a very technical term, but what it means is that glaciers that covered Finland 10,000 years ago, then melted and left a thin veneer of soil, or broken rock, for three to five meters over pretty much most of Finland. So there is very little rock that comes to surface. Most of the discoveries, in fact I could say, all of the historic mine discoveries in Finland have been found in that 1% where the rock comes to surface.  So 99% of the rock mass is under a few meters of glacial soil. That's where we've started to make our discoveries.

 

We purchased the property in 2010 from AREVA, the French nuclear company, where they had taken 30 samples of some amazingly high-grade gold samples. I didn't believe the gold numbers when I first saw the samples.  It had a month of work on the property at that time by AREVA. At the time we purchased all of AREVA’s properties through Finland. Subsequently, over the last five years, we've expanded gold discoveries over a 10x10 kilometer square area, so 100 square kilometers of potential, and it's 100% owned by Mawson. Over the last five years we've been limited by permitting, and you alluded to that. We will get to that very shortly. However, it means that we've drilled only in small areas with very shallow drill holes. We have drilled only 12,000 meters over the entire property to date, down to 30 or 40 meters average. So the property has just been touched underneath that thin veneer of that soil cover.

 

We've got some fantastic results, the 11th hole ever drilled at Rompas intersected 6 meters at 617 grams of gold just below surface. Eight kilometers east, where we've been working over the last few years, we have found a fantastic area called Palokas, where drilling has included 19 meters at 7.5g/t gold from surface. It's very early days, and we're going to move into a huge drill program shortly. 

 

So, that is the background to a great belt of rocks with gold discovered over a large area, on a scale that will attract the majors. We are not here to look for something small or medium sized. If this works, and exploration is a risky business of course, but if this works, it has a footprint that will attract the majors.

 

Gerardo Del Real: Wonderful. You touched on the permitting, so let's talk about that a little bit. You've put together a great team, you now have access to very important targets and you recently raised C$6 million. How do you plan on putting that money to work and what can we expect in the way of drilling now that you have access to these targets, that you stated all along, you feel are some of the more prospective ones on the entire property.

 

Michael Hudson: We just closed a C$6 million financing today. We're very thankful for the support that we've received. The financing was predicated on receiving our drill permits. Finland has been very slow to permit. There was a permitting hiatus in the country three or four years ago, where some of the permitting processes slowed down. We've now worked through those issues. I've spent more time in Helsinki Parliament, than I have kicking rocks over the last few years. It was important to understand where we sat, in terms of that whole permitting regime. A couple of years ago things were politically sorted out for the mining industry. Finland has returned to being a very strong and good jurisdiction with the right rocks with a long mining history for hundreds of years. Of course, we are not mining, we are exploring at this stage. We went through a standard appeal process for drill permits, that is common in Finland, and that took some time. That ended only a few months ago, and that really opened up this property for the first time.  It is a game changer.

 

We put the first drill hole into a virgin discovery at Rompas in 2012. Since then we have not had the greatest capital markets until this year so funding has been limited while we awaited permits. This drill program is the first systematic, rigorous, and deep program to test the Palokas/Rajapalot area with more buoyant markets. Today at Rajapalot we have only drilled 5000 meters and over the next 3 months we plan to drill over 10,000 meters more, so we will triple the drill meters into the project. Now it all comes down to the fortunes of the drill bit. 

 

Science would say that we've got a very good start, at a very high-grade project, from surface, over a very large area. This has got us very excited of course.

 

Gerardo Del Real: Definitely. Now, with the financing closing today, when do you anticipate drilling to commence?

 

Michael Hudson: We're starting straight away, we're wasting no time. We will have a drill rig to drill 700 drill holes systematically at 150 meter grid over the property starting immediately. This will be shallow holes to drill below that thin veneer of glacial soil that covers 99% of the property. The larger drill rigs, the drill rigs that can drill, 200 to 250 meter deep holes on average and down to 500 meters where necessary, will be moved in the next couple of weeks. We're just waiting for everything to freeze in that part of the world, which will allow easier access. Literally, it's all imminent.

 

Gerardo Del Real: Excellent, now I mentioned the size of the land package. I understand that you have multiple mineralization events within this system. You mentioned that you've had some very robust drill results in the past. What types of targets are you focusing on and how are you prioritizing them in such a big system?

 

Michael Hudson: That is challenge in such a large mineral system. What we are paid to do as geologists is to rank and find the best targets on the property. This is a challenge in such a large property.  We have something like 17,000 hectares, of 100% owned ground with no encumbrances or royalties. There's two styles of gold on the property, a nuggety vein style, and that's where we found the original discoveries. We've got six kilometers of very high grade visible gold under very thin soils on a ridge line called Rompas. That is now not our primary target.  Strangely we are not looking for the grade. We've literally got grades that I haven't seen in my career up to percent levels of gold over a very long extent there. Our key target is eight kilometers away at Palokas/Rajapalot where we can try to build drill tonnes, where we have a more disseminated system. So rather than searching for raisins in the plum pudding, we're looking for the flour in the plum pudding, that is a little more consistent. Nevertheless, we can't focus too early on what we've already found and drill too close to what we know in isolation. We will target areas to extend gold we have already drilled, but again with that 99% cover and gold dispersed over a very large area, we've got to stand back with this first systematic program and really find the best parts of the system. This will develop over many years. This is certainly not a one season drill target. We've got to use our best scientific brains to find those best areas and there's always a bit of luck thrown into exploration, no doubt.

 

Gerardo Del Real: Excellent. Now Michael, lastly, with the recent financing closing today, what does your cash position look like?

 

Michael Hudson: We just closed C$6 million and we had around C$3 million in the bank before we closed, so we're just a little shy of C$9 million in the bank. Our budget for this program is C$5.5 million. So we will still finish the season with a healthy balance. Importantly, we can increase the rigs if we start to receive encouragement. We've got a lot of work to do and in a very short time. Winters go very quickly.  Our main drill season will be until mid-April I suspect. We have more than enough dollars in the bank to put in a large drill program and with flexibility to expand based on some great results, that I trust we will see.

 

Gerardo Del Real: Excellent. Well Michael, you've put together a great team. You finally have your permits in hand. I know you're excited to get the drill bit turning. Is there anything else that you'd like to add?

 

Michael Hudson: No, I think you've hit all the key points Gerardo. It's people, great rocks, the scale and footprint of a potential deposit that will attract the majors, and Mawson Resources is poised.

 

Gerardo Del Real: Excellent, well I look forward to having you back on as soon as those assets start coming in, so hopefully we can have you back on soon.

 

Michael Hudson: I look forward to it Gerardo, thanks very much.

 

Gerardo Del Real: Thank you very much for your time today Mike.

 

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