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Gold Mountain Mining (TSX-V: GMTN)(OTCQB: GMTNF) CEO Kevin Smith on 400% Tonnage Limit Increase with New Gold
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO of Gold Mountain Mining, Mr. Kevin Smith. Kevin, how are you today?
Kevin Smith: I'm fantastic, Gerardo. Thank you so much for having us back.
Gerardo Del Real: Busy times. You provided a construction update recently. You also just announced a letter of intent with New Gold to increase the tonnage limit in its ore purchase agreement, so I actually want to start there because the increase is pretty consequential. We're talking a 400% increase, not a little bit. I'll let you provide some context on the details there, Kevin.
Kevin Smith: Yeah. As you know, we recently updated our PEA, and one of the major changes we made there, after doing some trade-off studies it was apparent that the correct move was continue to ship ore, instead of shelling out a whole bunch of money to build a mill onsite, and having tailings stored onsite. It looks like it'll drastically increase our economics, lowering our all-in sustaining costs from $735 down to $554.
At the same time, I think it'll streamline our goal of increasing our production capacity just to the limited environmental impact that we have when we're just removing ore, and shipping it to New Gold's facility. Because of that change, we wanted to substantiate that PEA with a document that showed a willingness on both sides to build a larger relationship and partnership here.
New Gold's obviously really excited about our high grade ore, giving them a bump in the copper con they produce. Then from our perspective, deferring that massive CapEx puts us in a really strong cash position, so that we can continue aggressively exploring the property.
Gerardo Del Real: Excellent. I mentioned the construction update. How are things coming along on that front?
Kevin Smith: They're going really well. We had another blast yesterday, so more of that waste rock is being turned into aggregate. That aggregate's being used to upgrade our haul roads, put some runaway lanes in, lengthen some lay down areas, and obviously, that gets us into waste rock mining right away. We're in full swing there, and when we get our permit from the government, we'll be well underway into mining already through the momentum of that gravel burrow.
Gerardo Del Real: Excellent. Thoughts on the gold space here with the little pullback that we're getting today?
Kevin Smith: Yeah. It's nice to see some excitement in the market. It was kind of falling asleep there again. I think it's a healthy pullback. We'll flush out some weak hands here. From my perspective, that meeting yesterday, nothing's changed from the Fed's perspective. They're just kind of talking about talking about making some changes in over two years from now, so I really don't see anything major, and I still really like the precious metal space. Obviously, the volatility, you've got to have a stomach for it. But I think overall, it's going to be positive, and we'll see the march back up here, July, August, and have a really strong finish to the year.
Gerardo Del Real: I couldn't agree more. Kevin, well said. Anything else that you'd like to add before I let you go?
Kevin Smith: Yeah. It's a $10 million financing we completed. It had a lot of demand on it, so that puts us in a cash position to continue really pushing the pace on our production goals, which is cashflow by November. Then once phase two is done, we're currently in conversations about adding a second drill to the property, so that we can really start scaling up this resource. Beyond that, I think you guys are up to speed.
Gerardo Del Real: Excellent. Kevin, thanks so much.
Kevin Smith: All right. Thank you, Gerardo.
Gerardo Del Real: All right. We'll chat soon. Bye now.Click here to see more from Gold Mountain Mining Corp.