Abacus Mining & Exploration (TSX-V: AME)(OTC: ABCFF) CEO Paul Anderson on Exploration at Jersey Valley & Drilling at Willow Copper Project in Nevada
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president and CEO of Abacus Mining and Exploration Mr. Paul Anderson, Paul how are you?
Paul Anderson: I'm just fine Gerardo, how are you?
Gerardo Del Real: I am well thank you for asking, a lot going on, you had some results on Jersey Valley that you published this morning, and you also recently updated us on the Willow copper property, which I'm very excited to finally see drilled properly this year. Let's start with Jersey Valley. We were all hoping for a hit, a discovery, better grades, longer widths of mineralization we didn't get it. Can you give us some context on that?
Paul Anderson: Yeah. So for Jersey Valley, this is our project up in the Battle Mountain trend of Nevada. It's an epithermal gold silver prospect. There was a previous operator in there about 15 years ago that did some work, did some drilling and got what we thought were pretty interesting grades. They weren't economic, they were sort of sub economic, but sort of very highly anomalous. We looked at the results, we looked at some of the geophysics they've done, we looked at some of their geochemistry. We thought, well maybe they just haven't gone down deep enough, let's try to do some more work on this. So we went in and did some more geophysics. We ended up extending the anomalies along strike for quite a distance, and then we've recently drilled it, we did three holes into the project just recently. So the results came out this morning.
We basically hit the same sort of values in gold and silver that the previous operator hit along strike even though we went a little bit deeper. So we didn't get what we thought we were going to get, we were hoping for certainly better numbers in terms of gold and silver, there is sort of a gold and silver in the system. It's highly anomalous. What we're thinking is that we maybe didn't go quite deep enough in this drill program. These systems are generally found because there is leakage from something deeper, it percolates up towards surface and it's you get sub-economic grades in gold and silver, and that's how these things are found. So we still think that we have something there, maybe we haven't gone deep enough so we have to look at some of the geochemistry we've done in the recent drilling and just to have a better look at the geophysics and all the rest and see where you know, where we can go next.
So it's still a very early stage project. People generally have to poke around in these things for a while to try to find something, and it generally comes down to finding where the faults lie, and then looking for some fault that's a feeder to something that, and then some sort of a cap rock that would we'd close the system off. So we're still working on the project and like I say, it is very early days. So that's about it for Jersey Valley. So did you have any questions on that before I move on to Willow?
Gerardo Del Real: It seems pretty straightforward, Paul, it seems like you're, you're going to analyze the data, take a peek, take a look, and kind of a meeting in the minds type of situation where you decide which way to go next, the way that I understand the project, the holding costs are relatively light, right?
Paul Anderson: They are. Yeah. I think we have about a $35,000 payment this fall to make on the property. So it's not an expensive property to hold by any means, which is nice.
Gerardo Del Real: Excellent, excellent. Let's talk Willow, which of course is within the Yerington camp in Nevada, you're planning to drill the way that I understand it is at least four vertical holes to about 600 meters. Is that correct?
Paul Anderson: That's correct. So Willow is our sort of second stage, a little bit more advanced project. You know we picked this project up about, I think it was 2016, late 2016, and then started really working on it in 2017. So we've had it for a couple of years and we did quite a lot of early work to do geophysics, geology, geochemistry, all the usual sort of things. We liked the project quite a bit because it's in a very good location. It's about an hour out of Rio, access is excellent, you can drive right across the property. We have good infrastructure in the area, in the town of Yerington, roads, rail, power, water, all that sort of stuff, and it's also an area that has four known porphyry copper or copper molybdenum properties deposits in the camp.
So of those, two were minded in the past, one by Anaconda Mining starting in the early fifties, up into the late seventies. Another one was mined just a little bit on surface, and the two remaining ones are, have not been mined yet. They're a little bit deeper and they've just never been developed. So it's a very active camp right now, very active area, Yerington. We have basically Nevada Copper is in production. They went into production about a year or so ago to the east of us. They're working on a skarn which is, it's part of the same porphyry system, but it tends to be a little higher grade. They've got a resource of about 572 million tonnes of 0.4 copper. So they're in production. Moving to the west Quaterra has quite a bit of grounds there in a feasibility study on the one deposit that was mined in the past, looking at the oxides.
So they've just started some drilling on that project. Moving further to the east of the property right next to us is called Ann Mason, and it's held by Hudbay.
Gerardo Del Real: Right.
Paul Anderson: So Ann Mason is the big deposit in the camp. It's sitting with a, they've got a new PEA out in April with a measured and indicated resource of about 2.2 billion tonnes of 0.34% copper. So these are big deposits when they get into production, they tend to be long life, low grade, they keep spinning out money once they pay the capital back. So they're nice deposits to find. Altogether in Yerington, a colleague of mine did a rough calculation of known copper resources in the camp, including past production and came up with a figure of about 33 billion pounds of copper. So it's a well endowed copper camp in a good location, easy to explore, which is why we like it.
So we picked up the Willow property, which is just adjacent to Ann Mason. It was worked in the past in the seventies by Kennecott Utah Copper and Anaconda, and they did quite a bit of work in the area looking for a fifth porphyry. They thought there was one in the area, they thought it might be on Willow. They ended up drilling three or four kilometers west of where we're working right now, and hit some porphyry dykes, but never found a porphyry center, and basically kind of walked away from it. Really nobody's touched it since we got involved a few years ago. So as I mentioned, we did quite a bit of geo chem and geology and the usual things that you do. And then we did a very short drilling program in 2018. We had some issues with the drilling, the drill basically got stuck in a couple of flatline faults, couldn't get through it. So we ended up of the three holes we drilled. We only really got one and a half holes drilled. But out of that, we got some very good information.
We got some sub-economic copper values, some moly values, and we took quite a few geochemical samples, which told us that we were probably close to a porphyry center. We had things like copper and molybdenum show up which tells you, you're fairly close to the center. We had a number of dykes and veins that were typical of porphyry coppers. That again, showed you're close to the center, but we just thought we were off by maybe a few hundred meters.
So the drilling we're about to do is to the north and to the west. We're going to step out a bit more and see if we can actually hit the porphyry center.
The other interesting thing about that drilling that we did, we managed to hit granite it's a particular granite in the camp, which is associated with the porphyries. So those four porphyries I mentioned all have that granite, if you want to call a host rock or an engine for the whole system, the whole mineralizing system, and you have to have that granite to have a porphyry in the Yerington camp, and the flip side of that is that there is no known instance of that particular granite in the camp, that doesn't have a porphyry associated with it. Well, lo and behold in the drilling we did in 2018, we hit that particular granite. So we thought that was very positive. So we sort of have a pre-discovery on Willow. We're pretty sure that we have a fifth porphyry there.
And now it's a matter of sort of doing the work to track it down and figure out where it is, how big it is, all of that sort of thing. So the target we're working on right now based on mostly geology, and geochemistry and some geophysics is at least one and a half by one and a half kilometers. So it's quite a large area. So if you think of a one and a half drill holes hitting that target, it's like a needle in a haystack literally.
Gerardo Del Real: Right.
Paul Anderson: So we're still working away at that. So the plan this time is to do basically at least four holes, we might get a bit more done, we'll see what the budget can take, and that's the long and the short of it, trying to, trying to track down the porphyry on Willow. So we certainly think that we'd have something there we've been looking to get back on it for a couple of years now, the market in terms of copper wasn't very kind until recently.
Gerardo Del Real: That's putting it mildly.
Paul Anderson: Yeah. As you know, the copper price is quite a bit better right now, which is nice, and there's not a whole lot of copper projects around. We've looked at a whole bunch of things over the last few years. There's a lot of very poor projects around, not a lot of good ones. We think we've got one of the good ones. So we're about to get going. The drill I think the drill is coming in at about two weeks, it's on another job right now. So we're waiting for it, we've signed the drill contract, we've got the geologists lined up and all the rest, and I should mention that I'm doing logistics from Southern BC for a project in Nevada is not very easy.
We still have travel research and of course due to COVID. So it's time consuming and it's not easy just sort of tracking people down, but we're almost at that point so it's good. We're looking forward to getting in and drilling this property again.
Gerardo Del Real: You mentioned the lack of quality copper projects. You also have a 20% ownership interest in Ajax right? Which has I believe 2.7 billion pounds of copper, 2.6 million ounces of gold and 5.3 million ounces of silver. We know there was a permit denial several years ago. It seems like progress is now being made on that front. How are things coming along with Ajax?
Paul Anderson: Well, our partners working away on it, they're not saying a lot publicly, but they are working along in the shadows. The long and the short of it is that the permit denial was we got caught up in provincial politics. Basically there was an election and the green party held the balance of power, and were looking to basically kill a project, a big project, and we sort of got caught in the crossfire. That was part of it, we also didn't have first nations buy-in completely. We certainly were talking to them, but we did not have an agreement in place, and that was used against us by the provincial government. So we ended up... It was our project wholly owned until about 2010 when we brought in KGHM. So for those of you who don't know KGHM is a very large Polish miner.
They mined copper in Poland. They have projects elsewhere in South America and in the US and in Canada. So they're quite a large outfit, and we brought them into to develop the project. So they've gone back to the first nations groups, and are talking with them and are trying to get to the point where we can get first nations buy-in into the project and hopefully move it forward again. As you mentioned this is a huge resource, Ajax, geologically Ajax is a little bit similar to Willow, a big porphyry system, large low grade long mine life Ajax has about an 18 year mine life initially. So these are big deposits, if they get into production they certainly go forever and they can make companies a lot of money. I should mention, we have a 20% carried interest in the project.
So we're carried through production, our partner puts the money up to get the project into production. Once it's in production we pay that money back, and we pay it back 85% of the profits go to pay the loan basically and the rest of the 15% goes into our coffers. So if you think of it as a net smelter return royalty it's similar to that in that we still get money every year, once that money goes into production that we can use for other purposes. So it's a good position for us to be in, we'd like to see it moving forward a little faster with our partner, but right now we don't call the shots, so we think it's moving in the right direction. I think they're doing the right thing in terms of trying to re-engage with first nations and sort of do things a bit differently than they've done in the past perhaps.
So that project is moving forward but slowly, I know people are looking for news. It's just one of these things where it, there's just not a lot of news flow on that particular project, but certainly we think it's a major asset for us. You know, we mentioned the lack of quality copper projects. Well, here's a copper project in what's generally known to be a fairly good jurisdiction, which is beyond the feasibility stage. So it's, there are very few projects like that kicking around. So that's the long and the short of it on Ajax.
Gerardo Del Real: Well listen a discovery at Willow will more than justify the current $12 million market cap that's been assigned to Abacus. Obviously Ajax is getting zero valuation as it relates to the market cap. I'm excited about Willow. I've written checks in the past to see Willow drilled properly. I think the discovery, the last go round of the Luhr Hill Granite is critical, and fingers are crossed we'll know soon, anything to add to that Paul?
Paul Anderson: No, I think we've covered pretty much all of it. You know we're quite excited to get back and drill. This is the second project we drilled this year which is nice we're pretty active and we're nice to get back to copper as well. You know, we do consider ourselves a copper company. Also we, as we've mentioned, we do have this gold property Jersey Valley. So, you know, it's nice to see copper get up in price a bit and we're looking forward to seeing, seeing what we can find at willow
Gerardo Del Real: Excellent. Excellent. Well, let's catch up again soon Paul, that was a good thorough update. Thank you so much for that.
Paul Anderson: Okay. Thanks a lot Gerardo.
Gerardo Del Real: All right, bye now.
Paul Anderson: Bye.