Categories: Base Metals
Topics: General Base Metals

Abacus Mining and Exploration (TSX-V:AME) COO Paul Anderson on A Compelling Copper-Gold Play with Multiple Upcoming Catalysts

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president and COO of Abacus Mining and Exploration, Mr. Paul Anderson. Paul, how are you this morning?

Paul Anderson: I'm really well, Gerardo. How are you?

Gerardo Del Real: I am well. I'm delighted to have you on. Abacus Mining to me represents one of the most compelling risk reward speculations in not just the copper space, but the copper and gold space. You have obviously the Ajax, the massive Ajax copper gold porphyry project of which you of course, own 20% of. For those not familiar, that is a project that has an after tax value at 5% of $543 million US. The project of course, had some permitting issues a few years back, but you had some news here recently that is extremely encouraging. You now have a new office for the Ajax project in Kamloops. Can we talk a bit about that? And then we'll talk about Jersey Valley and Willow, two projects which I believe on their own, what would make for as exciting a speculation as any company out there considering the market cap you have. It's a market cap of approximately $11 million Canadian. And as I mentioned, you have an asset, just in Ajax that has a US $543 million after tax value. Let's talk Ajax. Exciting times.

Paul Anderson: Well, thanks. Thanks, Gerardo. Yeah, Ajax, it's still our major project. We own 20% of it along with KGHM the Polish miner. As you mentioned, just a moment ago, we ran into some permitting issues a couple years ago where the provincial government declined to issue the permit. And it was basically based on lack of full agreement with First Nations groups in the area. That was sort of the bug bear at the time. Our partner sort of closed the office shortly after that denial and basically didn't really walk away from the project, but the sense in the community was that they were kind of gone. Recently they picked up activity. They've hired a new superintendent of the project who was appointed in late August of this year. A gentleman who's a mining engineer by profession. He lives in the community and he's worked on the project in the past.

He's very well qualified. I think he understands the local issues. And I was pleased to see that they picked someone of his caliber to run the project. Most recently, last few weeks, they've actually opened up the office again, back downtown in Kamloops. The office is open to the public with COVID restrictions, of course, but it is open to the public so people can wander in and sort of have a look and talk to people about the project. The issue still remained the same in terms of getting First Nations and other stakeholders on side. That's still very important for the project. Our partner's working away on that, I think maybe with a slightly new approach to some of those issues.

We're very encouraged with that. That's going forward. It's really the most activity on the project since we got the denial a couple of years ago. That's very encouraging. And as you mentioned, this is a big project. It's a large, long life project. Right now, it's got about an 18 year mine life. These are people's careers, basically. They could spend their whole career in this mine. It's something that it's good for the local economy certainly. It's good for the provincial economy. And it's got lots of copper and gold reserves so it's a nice project sitting there that should move forward with the right set of circumstances. We're encouraged that things are back on track with that, which is kind of nice and the gold and the silver and the gold and the copper price are up right now, which is encouraging. We're hopeful that this project is going to move forward again and provide some value obviously for shareholders, but local communities and First Nations and everyone else. That's sort of the long history about Ajax.

Gerardo Del Real: One last comment. And again, if the project does move forward, the shares are due for a massive re-rating. This project boasts 2.7 billion pounds of copper, 2.6 million ounces of gold and just for kicks, 5.3 million ounces of silver. As you mentioned, 18 year mine life. And I have to point out that the exploration upside is still excellent. I remember prior to the permit denial, there were some exploration holes that hit some significant mineralization that I think wasn't appreciated by the market because obviously the subsequent denial of the permit. Good to hear about the progress there. In the meantime, a lot to like with Willow and Jersey Valley. I'll let you pick the order of projects that you want to chat about. Both are in Nevada, excellent jurisdictions, one gold, one copper. A good time to have quality gold and copper projects.

Paul Anderson: Sure. Well, let's talk about Willow first and just stick with the copper theme, because Willow's our other copper project. Willow's down in the Yerington camp near Reno, Nevada. Yerington has billions of pounds of past copper production. There's one mine in production right now, Sunken Hollow, Nevada Copper's mine, just went into production this past year. It's a number of mines, a number of past producers in the area as well. We hold some ground sort of on the west side of the camp, which was explored in the past, maybe 20, 30 years ago, by some of the big companies in the area at the time, Anaconda and some of those. They had some success, but couldn't actually find an ore deposit. There were sort of sniffs of things going on. We took the project on a couple years ago and had another look at it.

And by that time, conventional wisdom was that you were too far west in the sequence of rocks that was prospective and there wasn't anything there. We basically proved the market wrong on that. We went in, did some exploration, did soils, did geophysics, did a number of drill holes and the result of that was basically that we found the host rock of the deposits in the camp. The big porphyry copper deposits in the camp and these are deposits that are basically tens of years long in terms of mine life. They're associated with a certain intrusive rock. And we found that intrusive rock on our property and around that intrusive is the deposits themselves. We basically got a couple of drill holes about three years ago. We found some sniffs of copper, some pretty good alteration minerals.

It told us that we were in the right area, that we probably had another porphyry copper there. The market turned a bit in terms of copper and we just felt that we couldn't really fund that project a couple years ago. We kind of put it on the back shelf, but when we did so, it was kind of a frustrating time because we had just done this drilling. We just made this sort of pre-discovery and then we didn't take it any further at the time. We've been saying that we sort of in our back pocket for the last little while. The copper price is up quite a bit now. We want to get back in next year and drill that area off. And I think the plan is to do sort of half a dozen drill holes and just demonstrate how big the target is, how deep it is, what the grades are in the area, that sort of thing. After that, it would need quite a bit more drilling to sort of drill it off and define the minerals resource.

But that initial drilling would give us an idea of the size of the deposit. Based on geophysics and geochemistry and a bunch of other things that geologists play with, it looks like it could be a fairly sizable deposit, but we do need to do more drilling to sort of define it and get in there and do that. The plan is to try to do that sometime, maybe spring of next year. I think the timing is right in terms of the copper price. And as I said, we have put that project on the back burner for a while, but we're still quite excited about it and looking forward to getting back and doing more work on that. I think that sort of wraps it up for Willow. Did you have any questions before I move on to Jersey Valley, Gerardo?

Gerardo Del Real: No, but a couple of comments that I think are important. One, I've been to the project, the infrastructure is absolutely excellent. A discovery here, again, like in the case of Ajax moving forward, would make for a significant re-rating of shares. The second is oftentimes we hear companies describe elephant country. “We're hunting in elephant country.” And it's in some far off remote area. This is in Nevada and this is in a camp, the Yerington camp, which so far has identified 33 billion pounds of copper. Again, that infrastructure advantage and having a producer right nearby is strategically significant if you're able to make a discovery of significance, would you agree with that, Paul?

Paul Anderson: Well, absolutely. The deposit you're referring to is Hudbay's deposit right next door. They're just east of us. That's the Ann Mason deposit. It's huge, it's 1.4 billion tonnes of 0.3 copper. It's just a mammoth deposit. And they basically bought out Mason Resources that held the property. They were part of the Entree Gold Group at one point and sort of split off. Mason Resources got bought out for that deposit. Hudbay has been working at it ever since, compiling the data over the last couple years and doing a bit more work. And they're trying to move it forward into production. If it goes into production, it'll be in production for years and years. It'll be a huge deposit. That along with Nevada Copper who have a large resource as well in the area, yeah, it's a pretty active little area.

And you mentioned infrastructure. You can drive from the town of Yerington out to the site, the Willow site in about half an hour. You're about an hour and a half drive out of the airport in Reno. Good paved roads, most of the way. And there's a road leading right through the property so you can basically drive through in a car. You wouldn't even need a four wheel drive pickup. It's pretty easy access, pretty ideal kind of working environment. We're quite pleased to be able to get people to get back in there next year.

Gerardo Del Real: Well, as a biased shareholder, a happy one and one that we'll be writing a future check if there's an opportunity. I'm excited to hear that there's plans to drill test Willow again. That's exciting. I'm also excited about the recent Jersey Valley IP results. That's the gold project also in Nevada. Can you speak to that a bit, Paul?

Paul Anderson: Yeah, absolutely. That's our project, it's the most active at the moment. We picked this up a little over a year ago. We were kind of looking for a gold project in Nevada and this one sort of fit the bill. We've done a bit of geophysics just recently and those results came back a couple weeks ago and we put the news out. The long and the short of that is that we had some existing IP geophysics that someone had done about 15 years ago and it showed some fairly nice anomalies, but they were all open in all directions pretty much. What we've done is we've extended the grid on both sides of that old IP grid. And we basically have ended up with a number of anomalies. There's five main trends of anomalies that the geophysical group has picked out.

The anomalies are still open so we didn't manage to close them off in the survey, which is a good thing. And they're sort of divided into three trends that are sediment hosted Carlin type gold deposits that a lot of your readers will probably be familiar with. Three of them are skarns. Skarns are, they're basically altered zones that form around intrusives. You get a bit of fluid moving around the intrusives and then sometimes you get a deposition of gold or copper or whatever. We've got a couple of stone targets and then we've got three of these Carlin type sediment hosted deposits, targets. And I'm most interested sort of in the Carlin type. I think they probably have the most potential. The largest of the targets is about 900 meters long. It's adjacent to a fault which might be a feeder zone to that particular anomaly.

On the other side of the fault, there's another trend, which is about 700 meters long. And I'm most interested in these because there's some old drill holes in the area. There are three old core holes that had very interesting geochemistry in them. You're looking for different elements besides gold, like mercury and some of the other elements that are floating around in these systems. And they're very anomalous in some of these other elements. They also have some gold and silver in them. They weren't quite economic, but they were sort of sub-economic over, I think the best intercept we had was about .2 gold over about 30 meters. .2 gold on its own is not economic, but it's certainly highly anomalous. It sort of gives us an idea that not only do these targets look pretty interesting geophysically and geologically, there's also some gold and silver in the system.

The plan is right now to take that data and we need to get some permits for drilling. It's all Bureau of Land Management land so you have to go to them and get drill permits. You're basically getting permitted to put in roads. There's a nice road right into the property, which is great. There's a geothermal hydro plant on the property itself so there's a nice road right to that. They've got a bunch of little dirt roads around the area. We can use most of those, I think for most of the drill paths. It should be a fairly straightforward process. Also with COVID, everything takes a little longer with some of these government agencies, but we'll be putting that request in, in the next couple of weeks. Certainly before Christmas.

Once we do that, we'll pick drill targets and I'm still sorting out exactly what we want to drill sort of three to four holes initially, probably. And something like three to 400 meters depth, each one. That's the general plan at the moment. Once we get the permits in hand, we'll look for a drill company and can you find a geologist in the area that can work on that? Because of course we have borders closed here and I can't come down myself, unfortunately. Hoping that's going to change pretty soon, but I think it's going to be for a little while yet.

Gerardo Del Real: I'm hoping so as well.

Paul Anderson: Yeah, we've been doing this geophysical program and normally I'd just hop on a plane a couple of times while we were doing the work and make sure everything was going okay and you just can't do that. It's harder to do long distance remotely some of the stuff. Drilling is usually a very hands on sort of thing. You just can't do it remotely very easily. It does slow everything down. We're hoping that's going to change certainly by Spring, early Summer next year, I think with vaccines coming and all that sort of stuff. Hopefully things are going to get better.

But in the meantime, we've got some really nice targets. I quite like them. I think, the next stage is basically getting there, do some drilling and see what they look like. The drilling that was done in the past, the group that had it about 15 years ago, did some very widespread drilling on different sorts of targets. Not specifically looking at what I'm looking at right now. They just poked a couple of holes in there. And it was sort of the last gasp. I think the gold price had dropped a little bit when they walked away from it and they never came back.

When I looked at the data originally, some of those drill holes, I just felt they didn't go deep enough. Some of them, you could see that the alteration elements were increasing towards the end of the hole, as well as the gold and the silver value. And some of the drill holes ended in mineralization. They just stopped. They drilled a hole, they get the asays back later and then say, "Somebody said we didn't go far enough. It looked like this thing continues." We want to get a little bit deeper than what they did last time and see if there's more mineralization there. But I quite like the property. I think it's got some really nice potential. We're pleased with the results so far. It's taken us a little longer to get here than we had originally intended last Spring when we started laying out programs but the world has changed in that time, in the meantime. That's about it for Jersey, I think, Gerardo.

Gerardo Del Real: Indeed. A lot to like there. Again, Ajax moving forward, drilling for copper, drilling for gold. It sounds like you may be doing both in Q1 of 2021, Paul?

Paul Anderson: Yeah. That's the plan. That's the plan. We are probably going to have to go back to the market for a bit more money for the Willow drilling as we stand right now. But the copper price is up. I think it's going to be good timing to do something.

Gerardo Del Real: I have an eager checkbook for financing or helping finance each of those projects. I think it's a heck of an opportunity. I think you're anchored well by Ajax and obviously any traction on that project. And it seems like you have it again, is going to get the attention of the market sooner rather than later, I believe. And we both know what discoveries, especially for copper and gold are doing in the market right now. A lot to be excited about. Paul, that was a really thorough update. I want to thank you for taking the time.

Paul Anderson: Well thank you for the invitation. I appreciate it. Appreciate giving me the update. Stay safe.

Gerardo Del Real: I look forward to announcing the commencement of drilling in the next several months. You stay safe as well. Thanks again, Paul.

Paul Anderson: Thank you.