Mawson Resources (TSX: MAW) CEO Michael Hudson talks PDAC, Recent M&A in the Gold Space, & High-Grade Gold Drill Results from the Rajapalot Project in Finland

March 12, 2019

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Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the Chairman and CEO of Mawson Resources (TSX: MAW)(OTC: MWSNF), Mr. Michael Hudson. Mike, how are you?

Michael Hudson: Still in a chilly Toronto. But all good, thanks.

Gerardo Del Real: I was going to ask if you've warmed up at all. I know that you were busy and active at PDAC. Mawson had some news, you drilled 17 meters of three grams per tonne gold at South Palokas in Finland.

Before we go there, I'd love your take on PDAC. How was the traffic? What was the sentiment there?

Michael Hudson: I think the numbers showed that it was similar to the last few years. I haven't gone back and checked the numbers, it's something like 25,000 people. So it was a town, a small country town or a big country town, that moved into Toronto that was just the mining industry. By nature, it's a very busy conference, Gerardo. I met everyone from ministers down to old colleagues and had lots of different properties thrown in front of my face. There was all the parties and the brokers were all hosting events, and the bigger companies were.

It's a fantastic event to network without a doubt. In terms of the market, we're not really pumping as a market and there's a lot of other sectors doing a lot better. So I think PDAC was okay, in terms of the mood. But my take on PDAC is that it's the industry pitching it to itself. So of course, it's going to be fairly buoyant and just showed a lot of things. There's a lot of juniors out there showing their wares and with a lot less dollars going into the business. So fundamentally, something has to change.

Gerardo Del Real: Now, in regard to gold, we had the announcement this morning that Barrick and Newmont were forming a joint venture, basically consolidating the operations in Nevada. Do you think that will spark a rush of M&A that will eventually filter down to the juniors? I couldn't help but notice that Newcrest also struck a big deal worth nearly a billion dollars Canadian. But I'd love to hear your take on whether you think that M&A will trickle down to the juniors and will the second half of 2019 be kinder than the second half of 2018?

Michael Hudson: And the first half.

Gerardo Del Real: Right.

Michael Hudson: Listen, there's a lot of smarter people in the business who look at the business and analyze it a lot more than I do, Gerardo. But you asked for an opinion so I'll give one. I think these things do tend to trickle down, right? The mid-tiers are making money and from a production point of view, the majors are making record profits and now there's only one way for them to go and that's consolidation. It will inevitably trickle down to smaller assets.

And then one big thing is that all these mergers don't create new mineralization in the ground, it is only exploration. So, I feel good that what we are is the engine room of this business, and eventually that will be recognized. Now, it's being recognized already by the majors. Well, how much money did the gold majors put into junior explorers including Mawson over the last few years?

It was getting up towards a billion dollars. I don't know the number exactly, but it was fairly significant, right? Juniors and mid-tiers. So they've seen the writing on the wall. I think it all goes well for market activity and the recognition that new resources are required.

Gerardo Del Real: Let's talk about new resources. Mawson drilled 17 meters of 3 grams per tonne gold. Mawson has been the recipient of some of that major interest with your strategic partner in Finland there.

Let's talk about the latest results. I have to believe that you're encouraged by the new conductors at both Palokas and South Palokas, which the news release was very good and clear about stating that those should be associated with further mineralization. How are things coming along on that front?

Michael Hudson: I'd say that it was a good, solid press release, first up. I think it was basically the head grade of the resource. We hit 17 meters as the highlight result there, 60 meters underneath the resource itself at South Palokas, which was at the very top of one of these conductors. So it was a first up test on one of these conductors at South Palokas and we extended mineralization successfully and got what was a good grade, good thickness. That conductor specifically at South Palokas heads down 500 meters below and is only limited by the technique that we're using to measure this with the ground EM technique.

So that was great and we've got another one of those that has just emerged at Palokas, which is about 500 meters to the north. These are 100-meter wide conductors that extend 500 meters below the resource areas, just as we see it at another part of the prospect, which is a few kilometers away at Raja. So it's building up. Then we've seen more in areas where we haven't done much drilling at all at the hut, which we will be drilling again at ideally very soon.

And then we're doing more EM as we speak, where we've never done it before at a prospect called Rumajärvi, which is, once again, over this large area. It's another few kilometers south of Palokas. And importantly, that area had more boulders than any other part of the prospect. I think there was 60 boulders that averaged 149 grams in Rumajärvi and we've only done some earlier stage drilling there. Haven't hit those boulders, importantly, and we haven't done the EM.

So the EM's looking good. The resource is being expanded and it was two steps forward and one step back, I think, because we haven't found the extension at Raja yet, drilling along those conductors. We got some low-grade gold, but we didn't find the higher grade hits that we're looking for. So there's still more work to be done at Raja to find that extension of mineralization, we just haven't found it there.

But South Palokas is a big tick and those other conductors, big ticks.

Gerardo Del Real: Excellent. Now I couldn't help but notice that we didn't get cobalt numbers on this release, which of course, cobalt is becoming a bigger part of the Mawson story, both for the value and for the strategic significance as it relates to permitting. I got to imagine that's likely due to the multi-element assays that you're waiting on from the lab. Would that be accurate?

Michael Hudson: That's precisely correct. They take two to three times as long, the multi-element essays. They have to get sent out of Finland, basically. We get the gold done internally in Finland and we get that back within a week or two, hole by hole. And it's about three to four weeks with pulps, the ground up rock, being sent to Vancouver.

Gerardo Del Real: Perfect. Drilling status update, how are things coming along there?

Michael Hudson: They're going well. We announced something like 6,000 meters. Since then – that was a week ago – we've drilled more. So we're about halfway through the 15 kilometer drill program and we've got the four rigs turning.

Gerardo Del Real: Well said. Mike, thank you so much. I appreciate the overview on PDAC. I loved your take on the gold space and fingers crossed that the second half of this year and with any luck, the second quarter of this year is kinder to us than the past year or two.

Michael Hudson: Well, we're creating value even if it's not being recognized at this moment, Gerardo.

Gerardo Del Real: And you have the cash position to be able to continue to create that value while the market turns, which of course is critical.

Michael Hudson: Absolutely.

Gerardo Del Real: Thanks again, Mike.

Michael Hudson: Cheers, Gerardo.

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