Categories: Base Metals / Precious Metals
Topics: General Base Metals / General Precious Metals

Doré Copper Mining (TSX-V: DCMC) CEO Ernest Mast on High-Grade Copper-Gold Intercepts at the Cedar Bay Deposit & Upcoming Drilling at Joe Mann in Northern Quebec

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the President and CEO of Doré Copper Mining (TSX-V: DCMC), Mr. Ernest Mast. How are you today, Ernest?

Ernest Mast: I am fine, Gerardo. How are you today?

Gerardo Del Real: I am well, thank you for asking. We have gold at $2,040 an ounce. Copper flirted with $2.95 a pound today. I joked earlier with someone that Doré Copper should be called Doré Copper and Gold. I believe, judging by the market action and your share price the last few weeks, people are starting to catch onto the fact that you have exposure to a lot of copper, a lot of gold and an infrastructure advantage that I think will bode well for you and the company moving forward. 

Let's talk about the most recent piece of news. You intersected 14.2% copper, 1.16 grams per tonne gold and 28 grams per tonne silver over 1.5 meters at Cedar Bay. And you intersected the high-grade vein in Crown Pillar at Copper Cliff. Let's start there. You had some other news in regards to Joe Mann. It's going to be a busy next couple of quarters for you, but how did you feel about the news from this morning?

Ernest Mast: We feel great about it. The intercepts really show the potential that we have in the camp that we're definitely a camp play. The intercept at that central vein, that 14.2% copper was the highest grade copper intercept we've ever had at Cedar Bay. It's located approximately 160 meters from a previous high-grade gold and copper hit. We're currently doing some infill in that area. 

As a reminder, the Cedar Bay mine operated from 1958 to 1990. The shaft is in place to about 1,036 meters and we're drilling at a depth a little bit below that. Although these holes are deep, the infrastructure's in place to get to it and mine, which is why we're drilling these areas.

That intercept on the Crown Pillar at Copper Cliff, extremely high grade, 7.3% copper and 13.6 grams per tonne gold. Between two intercept areas we have 5.3 grams per tonne gold and 3.65% copper. There's a series of veins that come to surface there and we only drilled one of them. It's something we're going to be following up on. This is extremely near-surface material. Technically we can find a way in which to mine it as it is close to the surface. It just shows you two examples that we have of high-grade copper and gold mineralization that we can continue to build upon.

Gerardo Del Real: Something that was notable in the release is the fact that the true widths are pretty consistent with the intercepts that make up the highlight numbers. Oftentimes you see a release and you see mineable widths in the highlight number in the release, and then you look at the true width and it's 0.2 meters of high grade and it's smeared. That was not the case here. I think it's important to highlight that given the existing mill and the infrastructure that you highlighted earlier.

Ernest Mast: That's correct. We used the directional drilling technique on some of the holes that we drilled that were announced in the press release. What we did essentially is we started out at a traditional dip of about 60 degrees, but then using directional drilling technology, we flattened the hole so it was almost horizontal and that allowed us to go through a series of structures so we could hit the structures pretty well at the same depth. That's why the true widths are so close to the downhole width.

Gerardo Del Real: Excellent. Program is ongoing. What can we expect from this specific program? Then let's talk, Joe Mann in just a second.

Ernest Mast: The program is ongoing and what we can expect is we'll be doing some down-dip drilling of the Cedar Bay 10-20A and B structures. These were structures that returned gold grades between 10 and 20 grams per tonne when we drilled them in 2018. We're testing the down-dip extension of those. That's something to look out for. In addition, in this area too, we'll probably have another look at some of the adjacent veins in the Copper Cliff area because of the spectacular nature of the results that we obtained.

Moving onto the Joe Mann property. We're going to commence drilling that, I would say, in about in a week and a half now. We're going to be targeting an area that had two intercepts that were drilled in 2008 after the mine had closed in 2007. The two intercepts we're following up on were approximately 1 ounce per tonne, 3 meters thickness and 1.8 meters thickness. They were located 150 meters apart. It's already highlighting that this could be a big area. It's 170 meters below the lowest mineworking. 

We'll start off with two holes and we'll do various wedges off those holes and look to establish a maiden resource in this area. If we're successful, it's actually going to be one of the highest grade gold resources in North America.

Gerardo Del Real: You reference in the release the eventual hub and spoke restart of the camp, and I mentioned the mill earlier. For those that are new to the story, can you provide a brief overview of that infrastructure advantage? Because relative to the market cap, even after the recent run up in share price, you're incredibly cheap given the market we're in.

Ernest Mast: Correct. This Chibougamau camp started in the late 1950s and operated until 2007. Topography here in this part of northern Quebec is relatively flat and all of our deposits have road access. Most of our deposits already have power to them and we do have a mill in place. The mill is, I'd call it, a traditional mill with crushing rod milling, ball milling, flotation obviously, and then thickeners and filters. The mill has some redundancy, so we don't need to run it at its full 2,700 tonne per day capacity. The furthest deposit from the mill is the Joe Mann deposit and that's about 60 kilometers. We we can implement a hub and spoke because all of the mineralogy in the ores is very similar. It's all amenable to gravity recovery of gold and flotation and the furthest deposit is 60 kilometers away.

Previously that's how the companies who were operating in the camp, that's how they ran their business. They actually did a hub and spoke where they had two or three mines, always feeding the centralized milling facility. They got exceptional recoveries on copper and good recoveries on gold. We intend to replicate it. 

Currently what we're doing is by drilling out the properties as we are, we're growing the resources. We've been fortunate in that our intercepts are high grade so we're going to keep the current high grades we have. What are the main deposits that we will be feeding to the mill is the Corner Bay deposit, which has a resource between indicated and inferred of 3 million tonnes over 3% copper. That's extremely high grade for a copper deposit. Our drilling that we announced early this year supports that that grade is going to maintain itself while the size of the deposit will continue to grow.

Gerardo Del Real: A lot to like there. Multiple drill programs, you have the mill, you have a business plan that I know the team is confident it can execute. Where's the market cap stand right now? I mentioned the opportunity there, Ernest.

Ernest Mast: Yeah, the market cap is approximately $31 million at this point. That's really just a fraction of the amount we have in preexisting infrastructure. You either look at it that you're getting the resources for free or you're getting the infrastructure for free. We do know the market will acknowledge the existence of high-grade resources and infrastructure as we continue on this journey.

Gerardo Del Real: It's important to note that you have some of the quote unquote, smartest money, patient money in the space. Can you share what some of those significant shareholders are? I know it includes Orion, which I believe owns just over 11% if I'm not mistaken.

Ernest Mast: Correct. We've got some private equity firms who gave us seed money when we were a private company and that includes Resource Capital Funds and Orion. In addition, Ocean Partners is our major shareholder with approximately 25%, 26% of the company. They have an offtake agreement for the concentrate production. We acquired the assets from Ocean Partners in 2017 for essentially 30% of our company. They're obviously long-term, patient shareholders, as they'd like to see these mines come into production and actually start producing concentrate. 

Our copper concentrate that we will produce will be high-grade copper. We have very few impurities or actually no impurities in the concentrate so it makes it a very marketable product. In addition, we do have some Quebec funds who have already invested in the company, plus insiders represents about 20% of the ownership as well. Very tight shareholder base at this time. As you said, very good long-term shareholders form the majority of our ownership.

Gerardo Del Real: It's a great position to be in with these prices to have deep pocketed committed shareholders that want to buy what you want to sell them. Ernest, anything else that you'd like to add to that?

Ernest Mast: No, that's it. I just think it will be interesting to see what happens with metal prices as we evolve. The copper and the gold stories in many ways are complimentary to themselves, but we may have a bit of a unique situation here as the world recovers from this COVID pandemic in that there's going to be a lot of infrastructure spending. There is a concerted move to the electrification of transport and all of that is going to require a lot more copper. Some of the initial responses of large mines and copper-producing companies doesn't bode well for them to maintain their production levels in the future as they've taken measures to minimize the amount of development being done and capital expenditures being done at the current time. As a result, we've been seeing some supply shocks as well on the copper. On the gold side, we all know what's happening there. The amount of fiscal stimulus that has been occurring has really woken the people up that gold in many ways is a true store of value.

Gerardo Del Real: You picked a heck of a time to public with a copper-gold company. Ernest, thank you so much for your time.

Ernest Mast: Yeah. Very welcome, Gerardo.

Gerardo Del Real: Chat soon. Take care. Be safe out there.

Ernest Mast: Thank you. You too.