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ALX Resources (TSX: AL)(OTC: ALXEF) CEO Warren Stanyer on Exciting Uranium, Gold & Critical Metals Portfolio
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO and Chairman of ALX Resources, Mr. Warren Stanyer. Warren, it's been a bit, how are you, Sir?
Warren Stanyer: Well, it's been great. What can you say? I mean, all of a sudden things turned around after Labor Day and that's the way traditionally things would be. So I'm happy that we're following that despite the worldwide pandemic and all these things that kind of upset the normal, shall we say, scheduling of investor interest. So this time it's consistent. Here we are. Everyone's back to work in the fall and coming and prices are strong and the share prices in all these exploration companies reflect that.
Gerardo Del Real: Well, and we have ourselves what I think is going to be a historic uranium bull market. I want to go in order, but I have to start with the staking of the Sabre Uranium Project. We have a lot to get to. I want to talk you optioning the Vixen Gold Project to first mining gold, which you announced on September 9th. And then I also know that we're awaiting assay results from the Firebird Nickel Project as well, but let's talk the uranium part of the portfolio for ALX. I know the stock has been moving price-wise, volume-wise. You're getting a lot of attention. We know the space is cyclical, nothing happens, and then all of a sudden you're an overnight success. I wouldn't say that you're an overnight success yet, but you sure have the market's attention, Warren. Talk to me about that aspect of the portfolio.
Warren Stanyer: Well, uranium was down for so long. We kept a lot of our properties. We really didn't let anything go. Partly because the government was giving people extensions of time on their claims. So there wasn't an any real urgency to go out and spend money, although that will be coming. So, yeah, we're excited about the marketplace and looked around for something to stake in the basin that wasn't some geologically inferior place. Sometimes there's staking done over top of magnetic highs that are known to be, say a granitic dome or something like that. And there's no chance of any uranium being underneath there, but people stake them and market the claims.
That's not what we were interested in doing. So we looked at the Northern rim and there's a place there that I remember from my time with Pioneer Metals and UX from the 90s and the 2000s where they had found, an oil company, Marline Oil had found uriniferous phosphatic boulders on surface that were basically in place and in one place they were in outcrop. So that's interesting and exciting. It's rare to find sandstone surface expression like that. Sometimes you'll find boulders and they'll be very rounded. So they've come from far away. That's not the case at this project. And I'm not sure that many people knew about the 40 year old, actually 40, or is it... Yes. 40 years old, 1979. Do the math for me. 42 years ago.
Gerardo Del Real: 41. I only know because I was born in 78 and I turn 43 next month.
Warren Stanyer: There you go. I mean, it's so long ago, but this surface expression is rare. So we looked at it, we staked it on Monday. We announced it yesterday and sorry, this morning. That's right. Wrote the news release yesterday. It's been a busy week.
Gerardo Del Real: Yes, it hasn't been lack of activity that we haven't been chatting. I think it's been more the amount of activity that leads us to where we're at summarizing multiple different projects and multiple commodities. Right?
Warren Stanyer: That's right. And there's a lot been going on. We've been also on our nickel properties on the ground. New forestry roads have been cut into the Electra project. The geologists were overjoyed because that's something where there's new exposure, where someone has come along and for free, they've scraped the rocks clear for you so you can see them better. I mean, that was just awesome. We found new showings there that no one's ever seen before.
Gerardo Del Real: That's geo heaven when someone does it for them. Right?
Warren Stanyer: That's right. And for us, I mean, we're looking at a quote to upgrade a road and it's in the $20,000 range. So for someone to have done it for us for nothing, because they have a different commodity they're pursuing, which is wood, that's just a really good thing.
Gerardo Del Real: Absolutely. How are things coming along in regards to assays at the Firebird Nickel Project?
Warren Stanyer: I looked into it just recently. They've been prepped and they're still not in the lab. It's hard to believe.
Gerardo Del Real: Okay.
Warren Stanyer: But with something like that, we can't put a rush on them because there's so many. We've got thousands of samples sitting there. So it would add a substantial increase to the budget, which was set out by Rio Tinto. And we're the operator. So we have to be mindful and prudent with the money. And there just wasn't anything to do other than put them in and hope they would turn them around more quickly. But I guess it's just been the common complaint in the last six months to a year that the labs are slower than they've ever been.
Gerardo Del Real: Sure. Okay. So sit tight on assays there. You also just optioned the Vixen Gold Project to First Mining Gold. Explain the benefit to shareholders there.
Warren Stanyer: I like the area a lot, and there's a lot of gold. It's a gold-rich place. The Birch-Uchi Greenstone belt is basically, it's like an extension of Red Lake proper in that they seem to be potentially connected. This Greenstone belt, it just happens to be the north Eastern arm of it. That kind of makes it like a U-shape if you see it on a map. It's remote, and when we looked at the costs of what it would, just to send somebody in for a day, you're looking at $10,000 in helicopter time.
However, First Mining has their own town. It's called the Spring Pool Camp. They work out of there at a much reduced rate, just the efficiencies of exploration, it's just much, much greater. So for us to go on our own, as opposed to taking some cash now and shares in their company, if there is an upswing, we're going to get a benefit of that, upswing in gold that is, plus the permitting was slow. It was just a lot of things that kind of let us think we like the area, but it would take us many years and many millions of dollars to really develop these projects. So we've handed the baton to First Mining. And, and I know they'll do a great job, they're a terrific group of people.
Gerardo Del Real: First Mining will have the option to earn, I believe it's an initial 70% interest, correct? By making cash payments totalling what, a little bit over half a million, right?
Warren Stanyer: Yeah. So it's five $550 in cash, $550,000 and $400,000 in shares. So the shares are calculated at the current value at the time, just prior to issuance. So a year from now we'll receive a hundred thousand cash and a hundred thousand of their shares. So yesterday we received, I believe it was $250,000 of cash and a hundred thousand of their shares. So we basically have covered off the costs of what we put into the project. And we're hoping that they'll on their regional programs, that they'll do well on our property. They will have the option to elect, to buy the remaining 30%. That's another million dollars they would have to pay. Half in cash, half in shares. There is a likelihood of that, but there's also a possibility we'd be in a joint venture with them for years to come at 70/30, which is a manageable amount for us to pay.
Gerardo Del Real: Uranium, gold, nickel and copper. Can't forget about the Canon Copper Project in Ontario, right? That's a lot of very important metals, metals that I think are going to be in favor for a long time. Where is ALX's market cap right now?
Warren Stanyer: Well, let's see. 11 and a half times 170 million. 17, 18. I think we'd be at about $19 million if I had my calculator in front of me, which I don't, but just under $20 million, somewhere between 18 and 20.
Gerardo Del Real: We'll call it sub $20 million Canadian. That's a lot of irons in the fire. And again, I think, we're just going here with the next leg up in the uranium space and in the metal space overall, I think you're right. That Post-labor day, there definitely is a whole lot more excitement there than there was over the summertime. And we know that gold will have its day.
Warren Stanyer: And with uranium now we have the Sprott Physical Uranium Trust. Have I said the name correctly? But I call it the Sprott price of uranium now because they are certainly influencing the spot price by their buying. And again, Americans, I believe are turning to these Canadian juniors because we do have the highest grades in the world in the Athabasca Basin. There's nothing like it anywhere. Yes, not everybody hits a home run, but I've been involved in two companies that did, so it can happen again.
Gerardo Del Real: Two companies, coincidentally, that went from, I believe these levels to trading and dollars not cents. Right? Do you want to share that story briefly, Warren?
Warren Stanyer: Well, when we started UX Corporation in 2002, people thought we were crazy to be involved in uranium. I had people tell me that. Why would I want to buy that? The IPO was 25 cents. Our first trade on the first day of UEX was 24 and a half cents. It never even saw 25 on the trading platforms. And we eventually sagged to about 8 cents a share in 2003. So a year later, we were down in the dumps and nobody wanted us. And then all of a sudden the spot price started to move. So suddenly we were at 25 cents by the end of 2003 and we made a discovery, sorry, we a deal with Orano at the time they were called Areva in early 04, suddenly we were 50 cents.
Then we discovered Black Lake in September. So suddenly we were $1, and then $2 and then three and a half and four and five. And then finally we were, well, when I left the company, we were at $7.50. So that was an incredible run. The second one was Patterson Lake. ESO Uranium, down in the dumps again, it's that rags to riches story. We were at 2 cents. We rolled back on Friday, November 2nd, 2012. So now we're at 20 cents and no one knows our new name or symbol, scrambling around trying to sell us. The next day, I got an email that there was a discovery of uranium at Patterson Lake, which has now led to the outlining of over 400 million pounds of uranium from Fission. Now with that deposit, Triple R, and NextGen with their arrow, which is on trend to Triple R.
So that was an amazing ride. On the morning of November 5th, we announced the discovery jointly with Fission Energy at the time. And I think we were a dollar by the end of the week or a week later, and then $2 and then $5. And we were bought out at $7.62.
Gerardo Del Real: And you were smart again. It happens quick in this space. It's why we sign up for it, Warren and I, for one am just extremely excited about being positioned early, and correctly in the uranium space and subscribers being positioned as well. But I think ALX is one of those companies that though it's starting to get attention, it's still flying a little bit below the radar and there may be a pretty good opportunity there. I will leave it there. Warren, anything else to add to that?
Warren Stanyer: Just that we have a great technical team and people on our uranium squad, especially that have been in that business for 30 years plus. They've seen every deposit. One in particular, Ken Wasyliuk was instrumental in the Patterson Lake discovery because he recognized an alteration product in hole 16 that he had seen at other places that he said, "You're right beside a deposit." Well, he was right. We were nine meters away.
Gerardo Del Real: Incredible.
Warren Stanyer: In a barren hole.
Gerardo Del Real: Incredible. It's a heck of a story. Warren, fingers crossed for a similar success. I, for one, will take half of that success if that's what materializes with ALX. Thank you so much for sharing. And thank you so much for your time.
Warren Stanyer: Thank you Gerardo for your interest, your support of the company. We appreciate it.
Gerardo Del Real: We'll chat soon.
Warren Stanyer: Thank you.