Bryan Slusarchuk’s Kenadyr Mining (TSX-V: KEN) Begins Trading on the TSX Venture Exchange
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the President of Kenadyr Mining (TSX-V: KEN), Mr. Bryan Slusarchuk. Bryan has significant international experience structuring, funding, and operating companies involved in mineral exploration, development, and production. He has structured complex debt financing transactions in the United States, Canada, and Europe with multiple top-tier banks. This includes negotiating and securing the first ever funding of a mineral exploration company by the European Bank for Reconstruction and Development, the EBRD. The principal focus of Kenadyr at this stage is a very prospective project in the Kyrgyz Republic with a large high-grade historical resource and a ton of upside exploration potential. Bryan, thank you so much for joining me today.
Bryan Slusarchuk: Gerardo, thanks a lot for having me on. You're always very early to these situations, and with us just coming to trade publicly today, you're definitely early here.
Gerardo Del Real: Well, let me start off by congratulating you and the team on successfully taking the company public. It's obviously a very exciting time.
Bryan Slusarchuk: Absolutely. When we acquired this project, not many people were out looking for gold assets. Gold was out of favor, and our timing was very good there as a team. And now taking this public today, with a resurgence of interest in the gold space, we just feel really fortunate as to our timing both on acquiring this gold asset and also listing and starting to trade today.
Gerardo Del Real: Well, let's get right to it. I want to get into the details of the flagship, because the property checks a lot of boxes, Bryan. It has a lot of past work done, it has a large high-grade historic resource, and like I mentioned earlier, it has excellent exploration potential.
But before we get into the details of the project, I'd like to talk a bit about the team. Because we both know that it all starts with the people involved, and Kenadyr has put together again a group that is very experienced in the area, with a lot of success in the past.
Bryan Slusarchuk: Absolutely. And a good team is always built around the technical professionals first and foremost. We're just so fortunate to have guys like Doug Kirwin, like Alex Becker, on the team. They were real early originators of this project. Doug, as many of your listeners will know, is the former Executive Vice President of Exploration for Ivanhoe, was credited with leading the discovery team at Oyu Tolgoi. Alex Becker, a close associate of his, is a Ph.D geologist, has written a number of landmark papers on the mineralization in this specific gold belt, and has also had a lot of success on the ground in this country and in this region. We're just so fortunate to have these guys leading the charge technically and geologically.
Now, the other part of the equation on a competent team is always capital markets experience, and to that end we're very fortunate to have Tookie Angus as the Chairman of the company. Tookie is also the Chairman of Nevsun Resources, a billion-dollar plus company with production assets and very advanced stage development assets. They operate one of the largest high-grade open-pit copper zinc mines in the world. And Tookie has developed a reputation over the years of being very early to these situations. His M&A experience is second to none. He was a founding director of Ventana Gold, which went from a micro-cap to a 1.3 billion dollar takeover in a short period of time, was a founding director of Bema, founding director of Canico. We're just really happy to have Tookie's leadership as chair.
We've also got a lot of other capital markets experience on the team. Mark Eaton is an advisor. Mark was head of global mining sales at CIBC. So it's a team with great technical expertise, but also with a lot of capital markets and M&A experience.
Gerardo Del Real: Well, you mentioned the M&A experience and the technical expertise and I don't think, actually, it's a coincidence that the quality of this project and the terms under which you were able to acquire it were so favorable. So let's talk about the flagship. The 100% owned exploration license consists of 164 square kilometers, which encircles the TBL mine. Now that mine has approximately 3.2 million ounces of gold in reserves, at 7.2 grams per tonne. Now interestingly, the ore body of TBL connects to Kenadyr's high-grade South Zone. A historic Soviet resource for just a portion of that South Zone shows an unclassified resource of just under a million ounces at a similar grade as TBL, 8.3 grams per tonne. And that resource is said to be open at depth and in all directions.
Now, additional Soviet drilling over 82,000 meters in 139 holes shows the historic overall drill gold potential to be 6 million ounces grading between 2.3 and 4.7 grams per tonne. Can you provide us with some context as to the proximity to that TBL mine and the benefits to Kenadyr, and of course the exploration potential that you believe exists?
Bryan Slusarchuk: Absolutely, Gerardo. And I think just listening to you give that bit of background information segues very nicely from the discussion on the management team and now you can see why it was so important not only to have such a great technical team - Doug Kerwin, Alex Becker, Brian Lueck, etc. - but also to have a team experienced in M&A. Technically, obviously because of the huge geological potential here, the very high-grade, very significant size potential, but also from an M&A perspective because of this very strategic location. Our land package encircles the Zijin TBL mine.
As you mentioned, the deposit that TBL mine is producing from at this moment connects to our South Zone. Now, I always caution people with regards to historic resources, especially unclassified historic resources, and these are historic based on Russian drill data. What I will say in this instance is that what we've seen, based on some modern drilling, is that there's huge potential to increase the grade. And the reason that I say that is that the Soviets, in their drilling of this area, had very poor core recoveries. Especially so in some of the softer zones of these large deposits. Because of that, the soft zones which were associated with very high-grade gold mineralization often were not assayed. This therefore represents big upside for us on the grade versus the historic numbers.
So we know this South Zone can get a lot bigger. Why do we know it can get bigger? Well, it's open in every direction, strongly mineralized at the extent of all drilling, open at gaps also. Why do we know this potential for much higher grade? It's because of the correlation between some of the modern drilling that has been done in the area, and that old Soviet data. We've seen the modern drilling consistently deliver higher grades. So this is a situation in our South Zone where it's already large, it's already high-grade. But the potential to enhance both is significant, it's real, it's there. And best of all, as you mentioned, this South Zone connects with the ore body that Zijin is currently mining now. And Zijin sunk CAPEX recently, of approximately $300 million dollars US, to bring that deposit into production. And that deposit of Zijin's connects with our South Zone. So not only is it high-grade gold, and not only is it large with big potential for expansion, but it connects to a super major’s existing ore body that is now in production.
Gerardo Del Real: You mentioned the investment by Zijin. Can you share a little bit about the infrastructure? How does that look?
Bryan Slusarchuk: The infrastructure on this project is wonderful. You can drive to the project in a Volkswagen. It's a paved road right to site. It's 100 kilometers from the capital city of Bishkek. There's hydroelectric power to the site. And remember, there's an existing operation, Zijin's TBL mine, that we completely encircle. So as far as logistics, you just can't get better than that.
Gerardo Del Real: Wow, it sounds like you have an exciting project. It's got a lot of exploration upside. You obviously have the benefit of the TBL mine next door. Tell me a little bit about the jurisdiction. How mining friendly and how transparent is the legal system in the Kyrgyz Republic?
Bryan Slusarchuk: We've had a wonderful experience there so far. Like I mentioned, Alex Becker, Ph.D geologist who's the CEO of Kenadyr, has been working in this area for the better part of 20 years. He has led a discovery in this country. He has written landmark papers on the mineralization in this region. He knows the country inside out. And we're very fortunate to have Alex there.
In general, from a macro perspective, this is a good country to work in. It's had a very stable mining law, very competitive tax rate. The GDP of the country is driven by the mining sector. Permitting is transparent, it's clear, and there's not excessive bureaucracy when dealing with the mining ministry. So we've had a very good experience there, as have many other companies. And we believe this is not only a good place to be logistically, not only has this belt produced some incredible world-class gold deposits, but it's a great country to work in. We're happy to be there.
Gerardo Del Real: Excellent. So you have a property that has multi-million ounce potential, and you've outlined a plan to kind of unlock that value. Can you provide shareholders and potential shareholders a glimpse of what to expect, news flow wise, for the rest of the year?
Bryan Slusarchuk: For sure. This company is a company with no debt, with close to 9 million dollars in cash, so we have a very solid balance sheet. We will be drilling, as outlined in our recent summary report filed on SEDAR, we will be drilling in the South Zone. We will be drilling on other areas of the property. And what we will be looking to do is to establish a correlation between the historic Soviet drill holes and modern drilling. And we believe, our technical team believes, there's a very good possibility that not only can we grow the size significantly of the South Zone, this is open in every direction, open at depth, but we can also increase the grade versus the historic grade reported. And that comes down to the situation that I described earlier, with poor core recoveries in the past.
So the big catalysts here are going to be the drills heading to site and the company looking to replicate or improve on those very impressive historic Soviet holes. Corporately, I would imagine that Zijin will be paying a lot of attention to what we're doing, because not only are we, as you described, next door to them, but our property encircles the Zijin TBL mine.
Gerardo Del Real: Excellent. What's the share structure look like? You mentioned you have nine million in cash, so you're well-funded. What does it look like share structure wise?
Bryan Slusarchuk: The share structure is a very simple one. What you have is approximately 80 million shares on a fully diluted basis. But when I say that, it's also important to point out, other than some finder warrants, there are no warrants here issued in this company. And the reason that I point that out is that with no debt, with approximately 80 million shares outstanding, and with proximity to Zijin, with the big historic numbers that we've seen through past efforts here, if people want exposure to this situation, if they want exposure to the drill results, if they want exposure to potential M&A activity down the road, they have to own the stock. They have to own the common shares.
There's only one way for people to enter the market, and that's buying shares in the open market. It's a big difference having a share structure that is this simple and straightforward, versus having a whole lot of warrants outstanding. So I think that the share structure, in addition to the geology, the mining team, the past high-grade gold results, the size potential in this area, the share structure is also a big bonus for us as we launch today.
Gerardo Del Real: It's definitely a compelling story, Bryan. Again, I want to congratulate you guys on the successful public listing, and I obviously look forward to seeing the company develop. Is there anything else that you'd like to add?
Bryan Slusarchuk: Not at all. I would like to thank you for following us in the early stage. You always introduce your listeners to situations when people have yet to hear of them and as they're emerging. Because of the fact we came out to trade today, under the symbol KEN on the TSX Venture, you've introduced us to your listeners as early as possible on day one. And I thank you for that.
Gerardo Del Real: It's our pleasure, Bryan. Again, I look forward to seeing news from the company as the company develops here later in the year. I can't wait to get the drills there on the property and see what you come up with.
Bryan Slusarchuk: Great. Thanks, Gerardo.
Gerardo Del Real: Thank you very much for your time today, Bryan.
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