Categories: Precious Metals
Topics: General Precious Metals

Anacortes Mining (TSX-V: XYZ)(OTCQB: XYZFF) CEO Jim Currie on Buying Gold for Pennies on the Dollar

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president and CEO of Anacortes Mining, Mr. Jim Currie. Jim, it's a pleasure to have you back on. How are you, sir?

Jim Currie: I'm well, thanks, Gerardo. How are you doing?

Gerardo Del Real: I am well. It's always a pleasure to speak with someone that can pronounce my name correctly. Let's get right into it. It's been an interesting summer to say the least, especially in the resource space. You had some results here recently that the market reacted negatively towards, and I would say a portion of the market. There's two types of traders and speculators in our space and you know this better than I do, Jim. There's people that understand the value and wait for the market to catch up, and then there's people that are just in it for the quick flip, be it a nickel, be it 10 cents, be it a dollar, whatever that is.

And I think here recently with Anacortes, we've seen an opportunity present itself as some of the people that were holding to kind of flip the stock decided to go elsewhere. I wanted to catch up, I wanted to talk about the recent drill results, and I wanted to talk about why you have a $20 million market cap with $10 million of that backed by cash, and one of the better oxide deposits in the world. Can we talk about all those things?

Jim Currie: Sure. Well, yeah, as you point out, the market's not been kind to us. We released a couple of holes back several weeks ago, particularly hole 501, which twinned a previous hole by Barrick, and didn't have quite the results that Barrick had. And we punched it about 230 meters deeper than the Barrick hole looking for a deep sulfide deposit. We saw gold all the way down the hole, but it wasn't economic. What that said was that there's probably a deep resource here, but it's not in this exact location. Yeah, we had a number of shareholders that had been looking for us to hit the ball out of the park on the deep hole. As you said, like Elvis, they left the building and in that they, they beat our stock down to a point where now we've got a market cap of $20 million Canadian.

And as which you correctly point out, we've got $10 million in cash. We now have one of the highest grade oxide development projects on the planet that has... Our recent PEA had an NPV after tax of $166 million US, which is $220 million Canadian. To me, it's the buying opportunity of the century. The holes that we put out so far, by themselves they're awesome. If you didn't believe the hype that didn't necessarily come for me, but from others that thought that this had a massive sulfide resource at depth, if you'd never heard that story before... I mean, when you've got 123 meters of 2.1 grams per tonne of gold underneath an 82 meter intercept of 1.62 grams per tonne gold, that's over 200 meters of two grams per tonne gold. At $1,700, $1,800 gold, that's a really, really great hole.

And then the other significant hole that we released, our hole 504, that was 143 meters of 1.43 grams per tonne. Again, and that was 400 meters south of the other holes. I mean, 400 meters, 1,200 feet, that's within the oxide pit that we proposed in the PEA. What that does for us is it really firms up our belief that for sure we've got a great oxide project that we're developing here. Going forward, we retrench a little bit. We're going to be a little bit more scientific about drilling deep from here on in. We're going to concentrate on bringing this oxide project to feasibility study as quickly as we can. We're continuing to evaluate the results that we've had so far and expect to start drilling again in the coming weeks.

And most of that drilling will be related to the feasibility study that we hope to work on next year. It'll be infill drilling, some more metallurgical drilling, so that we've got some core for testing. And two of the holes we've drilled so far were metallurgical holes, and they already are in the lab to undergo test results. You know what? It's still an exciting time for us. We were disappointed by the market reaction to the deep drilling, but it gives us new opportunity, and the opportunity is really to focus on what we're mainly about. And we're mainly about creating a mid-tier gold producer. We think the Tres Cruces oxide project is a great starter project.

We fielded a number of phone calls from companies that are equally as beat up as us and we all realize that what the market's looking for right now is size. We are talking to companies about potential merger opportunities, nothing concrete at this point in time, but there's a lot of interest out there with companies our size that are looking for something that combines decent assets into something that the market is a little bit more interested in. Yeah, that's kind of what we're doing and where we're going. And the summer's been pretty cruel to all of us, but we're looking for better things in the fall.

Gerardo Del Real: Well, anytime you have an asset with a net present value over $200 million Canadian, and you're getting an enterprise value of $10 million, it's a pretty severe disconnect. And one that obviously screams accretive to any mid-tier that would be looking to roll in an asset that is already economic, has excellent exploration upside, has fantastic grades. How is Peru as it relates to the project and the work that you've been doing? A lot of questions, obviously, about the politics and the changing of the guard seemingly almost weekly in Peru as it relates to the mining minister and some of the staff there. Have you found any troubles in working, securing labor, the lab work or permits on that front?

Jim Currie: Yeah, I mean, the permitting was a little bit difficult because the incoming government, they created a number of jobs for their supporters. What we found in the mining ministry, there was a lot of people that had never really worked in the ministry before. And it took a lot of hand holding on our part to get through the permitting process to get the drilling done but they came through in the end. We got our drill permits and all was fine. At a more senior level, word out there is that Castillo's not going to make it through his term. He's really not up to the task. He's had to buy favors. He's now getting a reputation for being corrupt because he's buying favors from various people to support him.

And I believe that the Congress is going to eventually impeach him and get him out of there. What we get next, I believe we'll have a more centrist government in Peru. I think as long as the person running against in the next election is anybody but a Fujimori. I think that will be very important. At the local level, we've had discussions with some of the local communities. Some of them have been very, very helpful. Some of them have been a little bit more negative and actually we're going to take this hiatus in drilling that we're going through right now to negotiate some concrete contracts, social contracts with the local communities, so that we fully understand what's going on here. And yeah, like I said, we're working on that. And we expect to be drilling here in the next few weeks, and we expect to take this thing through to feasibility study. And by the time we get this thing into production, there'll be a new government in Peru. We're not too worried about it.

Gerardo Del Real: It sounds like you have a clear path to getting this asset into production, a lot of value. Sir, thank you again for the update. Hopefully we see you soon.

Jim Currie: Hey, always a pleasure talking to you, Gerardo. Hope it's not too hot down there in Austin, and yeah, we'll talk soon.

Gerardo Del Real: All right. Take care out there.

Jim Currie: Thank you.