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

Doré Copper Mining (TSX-V: DCMC) CEO Ernest Mast on Portfolio of High-Grade Copper and Gold Deposits in the Chibougamau Area of Mining-Friendly 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. Ernest, how are you today?

Ernest Mast: I'm doing great, Gerardo. Really happy to be on your show and wanting to make the connection with your following and your subscribers.

Gerardo Del Real: This is a story that I am excited to help tell because it checks all the boxes. Anytime I'm looking at a company and considering an investment or providing the idea to an audience, there's obviously the standard checklist of boxes.

That's land package, that's commodity type, that's existing infrastructure, mining jurisdiction, and then, of course, experience. Does the company know what it's doing? Has it done it before? Doré Copper checks all of those boxes and obviously you've come out hitting the ground running.

You also just added a gold mine in Quebec, the Joe Mann gold mine. I want to talk about that. I want to talk about the flagship. But before we get into all of that, I would love for you to provide a brief background of your extensive experience, Ernest, because it's pretty substantial.

Ernest Mast: Sure. Originally I am from Quebec, so I do speak French. I obtained a metallurgical engineering degree at McGill University, then proceeded to work for 20 years with Noranda and its subsequent companies. Mainly the work was in copper, some of it in precious metal refineries and nickel as well.

Upon leaving Noranda, I was the president and CEO of Minera Panama, which was Inmet Mining's subsidiary for the giant Cobre Panama project in Panama. Then after that I started working more in underground mining and gained experience with underground gold mines and copper gold mines in different jurisdictions around the world.

In 2017, I started as the president of a private company that eventually became Doré Copper. We've been working on this for about two and a half years and we're really excited to have taken it public and raised some money and even acquired some new properties.

Gerardo Del Real: You've put together a pretty impressive team of people that have done it before. Can we touch on those names briefly, Ernest?

Ernest Mast: Yeah, so the founders of the company are Mario Stifano and Ewan Downie and myself. We have also made some additions to the team. One of them, Andrey Rinta, our Exploration Manager who came to us from Kinross with many years of vein-type exploration in remote areas. As well as Jean Tanguay was with the private company as well. He was a former Operations Manager for a previous operator of the facilities.

Then we have assembled a very well-rounded board with experience in operations, in geology and finance, people with experience in Quebec and people with experience internationally. We're quite happy with how the company is currently positioned.

Gerardo Del Real: Excellent. I mentioned up front that you are targeting high-grade copper and gold assets in Quebec. Let's talk about the flagship. Let's talk about the recent addition and then let's talk about what we can expect here in 2020. I know you plan for a very, very busy year and you're funded for it.

So let's get right into it. Can we talk a bit about the focus with high-grade copper and gold?

Ernest Mast: Yes. The flagship properties are the following, and we have more than one. The Corner Bay property currently has 3 million tonnes of resources. It's over 3% copper and we plan on doubling the size of the property with our current drill program. We intend also to maintain the grade over 3%. There's also about 0.28 grams per tonne gold in that property as well as some silver.

Another exciting property is the Cedar Bay property, which is a property with high-grade gold. The average gold grade in the measured and indicated is over 9 grams per tonne gold plus about 1.7% copper. That property is open along strike and at depth, and the location of this ore zone happens to be at the same level as the existing shaft. It's a scenario where if we can find more resources and look to put the Cedar Bay mine back into production, it's going to be a matter of dewatering the existing infrastructure and then we're right there at the ore body.

And then finally, the Joe Mann property we recently acquired. Joe Mann is a past-producing gold mine with a bit of a copper credit. During its operation it produced 1.1 million ounces of gold at a grade of 8.26 grams per tonne gold. It also produced copper at a grade of 0.25% copper. The gold is recoverable as a dore, but also it's recoverable in a copper concentrate. Joe Mann had some exceptional drill holes that were done after it last operated, or after it closed in 2007. We intend on following up on those holes. So those three properties I mentioned, we have one high-grade copper and two that have copper, but they're high-grade gold mines.

In addition, we have some other properties as well. The Devlin property, which is principally a copper property with 2.5% copper. There's also the Copper Rand mine, which was the largest mine historically in the camp. It's not in our immediate plans, but eventually it will fit into the plans. Copper Rand operated producing about 14.9 million tonnes and its grades were slightly less than 2% copper and slightly less than 3 grams per tonne. We have a really nice mix of high copper, high gold in Copper Rand, which is about 50/50.

Gerardo Del Real: Wonderful. Just to be clear, the initial drilling program will aim to expand resources at Corner Bay and Cedar Bay, and then you're also testing the high-grade potential over at the recently optioned Joe Mann property, correct?

Ernest Mast: Absolutely.

Gerardo Del Real: Has drilling commenced? You referenced the drilling program. I know it was scheduled to commence the second week of this month. Are the drills actually turning, Ernest?

Ernest Mast: Yes, they are. And we started drilling at Corner Bay and that's detailed in our most recent press release.

Gerardo Del Real: I mentioned that the company was fully funded. I believe that you had approximately $6.9 million in cash the last that I checked. I'm anticipating fully funded drill programs. Is that accurate?

Ernest Mast: That's true. Yes.

Gerardo Del Real: Debt, any debt?

Ernest Mast: No debt.

Gerardo Del Real: Excellent. All right, let's talk share structure. 28.976 million shares outstanding, let's call it 29 million shares. Is that still intact and who owns those, Ernest?

Ernest Mast: Yes, that figure is correct. The company is quite tightly held. The largest shareholder is a group called Ocean Partners, who are metal traders. They have an offtake on our future production. Insiders own 22% of the company and Ocean Partners has 26%. Then between RCF and Orion, two well-known private equity funds, they own approximately 21% of the company. Quebec Inc. or different Quebec funds own about 7% of the company. Only about 24% of the company is held by call it individual investors.

We also have only 1.18 million options out at $0.50 a share and there's approximately 3.5 million warrants that are outstanding. Most of the warrants have an exercise price of a $1.95 a share. Our capital structure is really held by long-term shareholders and I'd call it very supportive shareholders as well.

Gerardo Del Real: Can we talk a bit about the existing infrastructure? Because that's a pretty significant advantage that Doré going for it.

Ernest Mast: Correct. The three mining properties that we've been discussing – Corner Bay, Cedar Bay and Joe Mann – all have underground infrastructure right to the ore bodies. The only thing required to restart those mines would be dewatering and ensuring that the shaft is in good condition. Also, obviously we would need to acquire the mining fleet, but it's a huge advantage compared to other properties where you'd have to do all the development required in order to access the mines. In addition, we already have ventilation shafts in place.

In addition, we have a past-permitted mill with a capacity of 2,700 tonnes per day. The mill last operated in 2008, at which point it was shut down in an orderly fashion. In order to restart the mill, we will have to do some repairs and some upgrades. But again, that can be done at a fraction of the cost compared to someone building a greenfield site. And furthermore, we also have a tailings dam or a tailings management facility with a remaining capacity of approximately 8 million tonnes. That facility is about 2.5 kilometers from the mill. And again, that's a tremendous advantage when we look at restarting this complex compared to someone who would be working on a greenfield project.

Gerardo Del Real: Right. With Corner Bay and with Cedar Bay, Ernest, is there a plan to use the drilling that's ongoing and incorporate that into a future PEA?

Ernest Mast: Correct, that's really our plan. The plan being to increase the size of the resources with our current drilling. All of the holes that we're currently drilling are step-out holes to increase the size of the resources. We'd look to put together a PEA giving us approximately a 10-year mine life.

Now, we can incorporate other deposits into that. If we're successful with the Joe Mann option agreement, Joe Mann could be considered part of that PEA. The Devlin project could also be part of that PEA, where there's an existing resource of 670,000 tonnes. And in addition, eventually the Copper Rand mine could be incorporated into that PEA.

The reason we're not starting with Copper Rand right off the bat is that it's a deeper ore body and we think there's some synergies between Cedar Bay and Copper Rand that need to be flushed out in the first couple of years of the operation at Cedar Bay.

Gerardo Del Real: Well, Ernest, you're drilling, you're cashed up, you have an excellent share structure. I'm looking forward to chatting again once we start getting assays in. Do you have a timeline or a ballpark on when you anticipate those?

Ernest Mast: We should start getting the first assays in sometime around March. We'll probably issue the assays in groups where we can tie in a few of the drill hole results, showing how that ties into the current resources that we have.

Gerardo Del Real: Excellent. Ernest, look forward to chatting. Thank you for taking the time today.

Ernest Mast: Yes. Thanks very much, Gerardo. We will keep in touch.

Gerardo Del Real: Keep warm out there.

Ernest Mast: Okay, thank you.

Gerardo Del Real: Bye.

Ernest Mast: Bye bye.