Categories: Energy
Topics: General Energy

ALX Resources (TSX: AL) CEO Warren Stanyer On the Multiple Electric Metals & Gold Projects in the Portfolio

Jan. 8, 2021

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the chairman and CEO of ALX Resources, Mr. Warren Stanyer. Warren, how are you?

Warren Stanyer: Well, I'm happy the way the year has started. It's been kind of a barn burner. You know? There's fires burning everywhere. All kinds of interest in commodities and nickel is up, copper is up. Gold's had its little surges. Uranium's kind of flat, but we're still involved in that business as well. We have a lot of uranium properties. But certainly, the interest from some of these investment funds in the US has really helped the local, the Canadian uranium market, for sure.

Gerardo Del Real: No, listen, there's a clear pivot and a clear allocation of capital towards anything related to the electrification of everything and clean energy. Right? And I think that, for ALX people that may not be familiar with the company, given that you're trading at around 9 cents and a ridiculous market cap, you have a copper project, which we'll talk about here, that you just had some news on. You have a nickel project that you just signed a definitive agreement for. You have gold. You have uranium, as you mentioned. You find yourself here, Warren, with an abundance of projects with commodities that are really in demand right now.

Warren Stanyer: Well, and how it evolved was we were purely uranium. As a matter of fact, we were divesting gold asset stock in 2015 or 2016 around that time, because there was a feeling among our major shareholder base that that's where we should be. And yes, we all had hope for the future of uranium, but it just really got stagnant after a while, so turning to other commodities in 2018 and sort of taking baby steps in different directions. And then in 2019, we were fortunate enough to stake the majority of the Axis Lake and Rea Lake nickel deposits, which then led to what we have going with Rio Tinto on what we now call the Firebird deposit, where we eventually acquired more ground. And so that's all very exciting. The permit will be coming this month and hopefully we'll have a drilling decision.

And I've heard that, well, I know that Rio Tinto really likes the project or they wouldn't have come to us in the first place. And the VTEM airborne that we did was successful and we see new targets. It's very exciting. We just want to get on the ground with the drill. So all of this evolved over time. Then it was, "Oh, look at the price of copper. And what about that copper project we've been hanging onto for five years?" And that's the Cannon Copper Project, which we've now quadrupled the size of the claims, quintupled, sextupled the amount of claims from what we were hanging on to, which covered the historic mine. I don't want to get into too much about quoting the historical resources. I mean, they're in our disclosure with all the language approved by our lawyers. I'd rather leave it at that.

But there's high grade copper in a system there. And we just happen to have the claims that cover a series of zones that are all running, according to the old timers, a couple of percent copper, between one and two percent. The resources quoted in all of their old reports are actually higher than what we disclosed today, but we're not going to get into it because it's about all the nuts and bolts of how you come up with a resource estimate in the modern era. Everything's different now. We're just going by what the government quotes, the metric tonnes, the grade that they're satisfied with reporting, and so that's what we reported.

But there is copper there, and when you read the story of Cannon, the Cannon property, it's a story of cycles and commodities that killed interest in the project from time to time. It's a story of incompetence of certain operators that tried to do mining and they weren't really qualified to do it. And this is what you find when you read these old reports. They're all online. It takes time. They're excruciating to download, to read, to remember who said what and when, but that's the story that we have seen. So here we are in a new era. The property's never been flown by a proper airborne EM survey. So luckily, we have some two-year-old magnetic data that the government flew that's really good, and that's helping us. So what we want to do is fly it, see where these zones go. And here's the best part, Gerardo. Ask me what the best part is.

Gerardo Del Real: Warren, in your estimation, what would you describe as the best part?

Warren Stanyer: So in one of the old reports, more than one, they referred to a hole that was drilled that was over 1,900 feet, which we discussed in the news release today. It was called CR-15. And they keep saying, "CR-15." This is like the White Pine Mine style of mineralization out of Michigan. This is like the African, I guess the Zambian Copperbelt, where you get into these sedimentary hosted horizons that go for a long ways. And we've tapped into it with this one hole, and we'd like to go back and do that some more." But they never did.

They stuck with the three to 500 foot holes and outlined a resource for the time of the, let's call it the near surface. But they knew that there's the potential for something big below. And because, this is the cool part, Elliott Lake, we're 33 kilometers from, 20 miles. Elliott Lake was ... Do you know about Elliott Lake and the uranium boom of the past?

Gerardo Del Real: No. No, no, no.

Warren Stanyer: Oh, it was our premier uranium. I'm not sure how many millions of pounds were mined, but it's got to be 50 to a hundred million or something. It went for years and years, but it was very deep. So in the area of Cannon Copper, people would drill deep holes, 5,000 foot holes and beyond, looking for more Elliott Lake style uranium. They didn't find it in our area, nothing like Elliott Lake. But what we get is old drill logs from uranium hunters, where you can see that after they get to that 2,000 foot level, they're finding chalcopyrite and they're not even sending it in for assay.

Gerardo Del Real: Hmm. That is fascinating.

Warren Stanyer: Because they were looking for uranium and they didn't have a budget. All they were using is a scintillometer, a Geiger counter to measure the core. And if they got something hot, they'd send it in to the lab, but they never really did. So they would just describe the chalcopyrite at depth, and we see it in several places. So this depth idea, it's going to take a lot longer to figure that out. And maybe we'll need a major company that believes in that theory that it is like White Pine in Michigan, that it is like the African Copperbelt, because in the '60s, these guys would go, "Oh, if this thing is true, it could be beyond imagination." Period. That's what they put in the reports.

Gerardo Del Real: That is fascinating. That is fascinating.

Warren Stanyer: It's highly speculative that there is a deep resource, but what we do know is there's a younger, pretty rich resource of some kind. We don't know how big because it's old timers' stuff. And so that's what we want to measure with geophysics and see where these things go. And there's the likelihood of many other zones that were never touched and it's been dormant for a long time. So it got pretty exciting this week, the more we dug into it and what the geophysicist's opinion was when he looked at this modern magnetic data that this could be good. It could be really good.

Gerardo Del Real: I mentioned during the intro the abundance of projects, Warren. How do you prioritize, moving forward, which projects see attention? You obviously have a major partner on one of your projects, but again, you have several other very high quality projects that I believe merit attention and exploration.

Warren Stanyer: Well, the tricky part of all of this, when you have a lot of balls in the air, is funding. How much do you spend? What do you spend it on? Which claims need attention? When you called, that's exactly what I was speaking to our president and chief geologist about. We have to get a very good grasp in 2021 of where we need to spend money and how much. And how long will the claims be good for? And all of these things. When you get into a lot of properties, that maintenance of the properties has to be very well thought out. What do we let go? What don't we care about anymore? What do we care about? Okay. So all of this is, we're underway on this. And then that is how much money can we raise? Okay. So what I say is we need a discovery. I think that Firebird is going to produce that, and we still own a hundred percent of it at this point. So a discovery at the Firebird Nickel Project will help us raise money for all of our other projects, because we don't have to spend our own money at Firebird.

Gerardo Del Real: I like the strategy, it's smart. Absolutely.

Warren Stanyer: Yeah. Rio Tinto is spending up to $12 million in five years. The first three years, they have to spend $3 million minimum. And I mean, if we get a drilling program going this year, we'll be up to $2 million after, say a year and a half, something like that, with the airborne plus drilling.

Gerardo Del Real: Would you like to remind the audience what the current market cap is?

Warren Stanyer: Let's see. I guess, $13 and a half million.

Gerardo Del Real: Yeah. Yeah, there's a lot of upside, given the joint venture with Rio Tinto, given the quality of the other projects. Fingers crossed for discovery, Warren. Is there anything else that you'd like to add? I know you're kind of playing it close to the vest when it comes to the Cannon Copper Project, and I'm sure that you have your reasons, but is there anything else that you'd like to add before I let you go?

Warren Stanyer: I would just like to say that I've been involved with companies in the past where we were trading at a fairly low level. We had about the same market cap that ALX has right now. The one that comes to mind always first and foremost for me is UEX Corporation. The summer of 2003 we were trading at about 8 cents. We did a 10 cent financing. I guess somebody paid some fund from New York, within a couple of years, we were at $4 and $5. So it's all about discovery. So we don't give up because you never know when it's going to come.

Gerardo Del Real: Well said. Well said. The risk, the reward. That's why we do this. Right?

Warren Stanyer: Well, that is. And being in that situation before, and you get up every day and you have to have that faith that what you're doing is right. You're doing the best that you can with the tools that you have, and it can lead to a discovery. So I think in the case, as I've already stated, I won't belabor that point, but we've got properties on the verge of discovery. So let's get out there and get drilling and make them.

Gerardo Del Real: Given the backdrop in the commodity space and the commodities that these projects are prospective for, I've got to believe you're feeling encouraged and you're feeling excited about the rest of the year.

Warren Stanyer: And at the same time, you have to remain level-headed like a samurai, not happy, not sad. If you've read any of their work, their writings, not happy, not sad. No, but I mean, obviously you make a discovery, it's woo-hoo! Pop a few corks. We deserve it. So let's see what happens here.

Gerardo Del Real: Sounds good.

Warren Stanyer: I'm looking forward to this year, for sure I think, after we've been through some lean times in some of these commodities markets. And now things are changing for the better, so let's get out drilling.

Gerardo Del Real: Well done. I've complimented you in the past with the multiple companies you're involved with on how you've used bear markets to position for bull markets. And you position shareholders well. You should be commended for that. And let's hope that you can deliver a discovery or two.

Warren Stanyer: Well, and thanks, Gerardo. And there's another Warren, Warren Buffet, who would always say, "Buy stocks when nobody wants them." And what I've learned in the last few years is look at properties that nobody wants. Try and figure out: What is it? Is there anything there that everybody missed? So that's basically what the philosophy has been. So let's see how it pans out here, literally.

Gerardo Del Real: Well said. I like that other Warren guy. I think he's got a bright future. Thank you for your time today, Warren.

Warren Stanyer: Thank you, Gerardo. And I hope, I wish you and your family all the best in Austin.

Gerardo Del Real: The same to you, Warren, the same to you. I suspect we'll be chatting very soon on a number of fronts.

Warren Stanyer: I hope so. Thanks for the call today and the interview. Appreciate it.

Gerardo Del Real: Thank you.