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Mawson Resources (TSX: MAW) CEO Michael Hudson on Winter Drill Program: “The Drill Holes Really Delivered”

July 7, 2017

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. Mike, how are you this afternoon?

Michael Hudson: Fantastic. Thanks, Gerardo. Nice to be back.

Gerardo Del Real: Well I appreciate the opportunity to catch up. You recently put out some news summarizing the drill program on the district-scale, high-grade gold project there in Finland. Can you summarize the program and were you able to achieve the objectives that the program set out to do?

Michael Hudson: Certainly can. We pulled together all the results into the release that came out this week and that was the first time that the market had a chance to see holistically what the program meant, as well as ourselves, of course, as we're pulling it all together. So basically we did more than we said we were going to do. We drilled 55 diamond drill holes for 11,000-odd meters. We completed 1,800 base-of-till drill holes that averaged 4 meters down beneath that blanket of glacial soil or till that covers 99% of the property and masks all the rocks. We did lots of geophysics.

Then, most importantly, the drill holes really delivered. I mean, we had an exceptional hit rate, if you like, from a technical point of view. Now 42% of our holes hit at least a gram-meter of gold which is quite a staggering hit rate in terms of having a regional scale program under cover, in terms of we couldn't see what we were drilling. So there's a lot of gold out there. Then 28% of our holes hit greater than 5 gram-meters and then we can get into some of the detail if you like. But it showed scale, it showed grade and lots of new discoveries, and then a hell of a lot of upside. Only 5% of the mineralized host has been tested out of a 27 kilometer trend, just in the Rajapalot area, which is maybe only a quarter of our prospect area.

It was a very large success, if you like.

Gerardo Del Real: Now I think obviously the program was very successful. You mentioned the 42% of holes that you hit on and the 28%, I believe, that recorded greater than 5 grams per tonne. I think the other thing that's important to note is that the average drill depth on the project remains at about 109 meters. Is that accurate, Mike?

Michael Hudson: Precisely, Gerardo. So it's early days in the two dimensions, like I said, 5% of the area tested in Rajapalot but really only down to very shallow depths. The systems are open in all dimensions, so it's early days and a great start.

Gerardo Del Real: Excellent. Now I understand that you and the Mawson team are right now in the midst of building a comprehensive, 3-dimensional structural model from the drill results. Can we talk about that a bit and how that's going to help define future drill targets and whether or not we'll see drilling here in the next 6 to 9 months again?

Michael Hudson: Sure. So what we're doing is, even though we've got a very strong technical team in Mawson, it's always important to use the best brains in the world to pull together these complicated systems. There's a great saying for your listeners if they haven't heard this one, “Gold is where you find it.” It's an enigmatic metal and manifests itself on our property, as it does in many parts of the world, in different forms so we really have to put a lot of brain work here to try and unravel the controls on mineralization. So we're using some of the best brains, Laurent Ailleres and Nick Oliver, and literally there's very few people in the world that have these skills and we've sought them out. They're working with us over the coming months to pull together this model. That will really simply bring out drill targets for the next winter at Rajapalot when we're permitted to get back in and have the logistical ability to get back into those wetter areas when they freeze.

Also, we're looking at going back, and we'll be putting out a little bit more news on this in the coming weeks, but we're looking to go back to the surrounds of Rompas, where we haven't been for five years. We've recently had some ground permitted there. We can drill those areas during the summer which is very important to have the year-round news flow that we need on this project. So we'll put out more information about that program, but that program will start in August. We'll be back drilling again very shortly.

Gerardo Del Real: Now you mentioned it being earlier days and you also mentioned that gold is where you find it, right? Now 150 kilometers north of the project, Agnico Eagle's got a 7.8 million ounce, I believe, project just north of your project. Are there similarities between the two projects or is that reaching there, Mike?

Michael Hudson: No, it's very similar in many respects and it's the same gold event that formed these systems so it's the same age gold, which is really important. It manifests itself slightly differently in Kittila. They have refractory mineralization so they have to pressure leach their gold. Our gold is free so there's some differences but, in a gross perspective, it's the same or a very similar mineral system. So it's a great analog to have just up the road and Agnico Eagle are exemplary operators. They're doing a great job in Finland. We only hope we can replicate their success.

Gerardo Del Real: Interesting, interesting. Now you mentioned news flow. News flow is important. The precious metals market is a bit down right now. It's a pullback that I think many people including myself were expecting but what's next as far as catalysts for Mawson? What can we expect in the way of drilling, Mike?

Michael Hudson: Well, continued discovery I suppose is the simple answer but I think the change in focus for us. This year it was very clear that we were looking for the system. It was the first systematic, large-scale test on the property that we'd put into it after many years of course of waiting for permits. We're now over that hump. Everything is essentially permitted that we need to have permitted at the moment for drilling. But we need to focus next, this winter especially, at Rajapalot on looking at those higher grade areas that we've already discovered and being systematic at a different scale, a closer scale to try and put together resources on the property. Of course that's the next level up for us but nevertheless we still need to continue.

Like I said, it's very early days so you just don't want to focus too hard, too early on the one part of the system. We're looking for the elephant here and you just don't drill a small part of the elephant initially. You really make sure you test the larger part of the elephant before you start drilling out the detail. But nevertheless I'd say 50/50 between resource drilling and expansionary drilling, if you like, is what we need. Then of course in the other parts of the property we need to bring those up to an equivalent level that we now have Rajapalot where we know we've got a discovery and that, I'm speaking specifically about the Rompas area itself. So we've got very good geological theory about gold at surface but we need to demonstrate gold in drilling and looking for the disseminated style of gold, I should say, like we have at Rajapalot and get that up to the next level.

Gerardo Del Real: Well, it sounds like a busy, busy time for Mawson. Mike, is there anything else that you'd like to add?

Michael Hudson: We hit the key points, Gerardo. It's great to see that the drill program worked this winter. We found what we were looking for and we've got a great basis to kick off in the coming months, in six months, and over the next year and onwards.

Gerardo Del Real: Excellent, perfect. Well, I hope to have you back on once you define those targets and once you better define what the next step is. Mike, thank you so much for your time.

Michael Hudson: Thanks, Gerardo.

Gerardo Del Real: Chat soon.

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