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

Kingsmen Resources (TSX-V: KNG)(OTC: KNGRF) CEO Scott Emerson on $10 Million Market Cap with Billion Dollar Analogues

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president of my favorite silver-gold play and one of my largest personal holdings. I'm talking, of course, about Scott Emerson and Kingsmen Resources. Scott, great chatting. How are you today, sir?

Scott Emerson: Very good, Gerardo; everything’s good.

Gerardo Del Real: Well, listen, you and I first met — and I can't believe it's been maybe a year and a half ago now — and at the time, you had an idea… and you had a bunch of properties you were trying to consolidate.

And you were really enthusiastic about the possibility of consolidating, for the first time ever, this past-producing brownfield district, silver-gold district, in northern Mexico in a very prolific central Mexican silver belt in a very pro-mining part of Mexico that's home to many, many, many mines. 

And I thought, ‘Well, that's neat, Scott… I'm glad you're excited! Everybody has a lot of ideas. As you know in our business, we hear stuff every day. But let's definitely keep in touch and let's follow up.’ And sure enough, what's happened since then is you were able to consolidate the entire district. That was great! You were able to get the permits. That's fantastic! 

You were able to structure a deal that's really shareholder-friendly in the sense that you don't really have any real payments per se for many years down the road. And by then, we'll know whether this is the big success we think it's going to be or we'll know that it's not. But it really makes it to where we don't have to dilute to make these big payments right up front.

So everything you've done is fantastic. You just raised C$1 million; we helped a bit with that. And now, here you are identifying a brand new silver-gold drill target that looks appetizing as all heck and that many companies would consider a potential company-maker on its own. 

I know that was a long introduction but I wanted to set the table for you to let you talk to us about this new target, how you put everything together, why you're so excited, and what comes next.

Scott Emerson: Thank you for that, Gerardo. And you did a great introduction and a great high-level summary of what we've been able to assemble here in the last 18 months. 

I think something you didn't mention in that is that we have a target identified for this project with a target potential of over 200 million ounces of silver-equivalent [AgEq]. And that was really based on the old mine because we were focused on looking at it along strike and at-depth. This project has never been drilled in those two areas. So that was where we focused our attention here throughout our summer program.

Along with that, we started to sample the entire project area, and we came across an area that was very highly mineralized, predominantly silver. We have released those numbers, and they're quite high-grade. And then, I started to put the pieces together that we had acquired over those 18 months from other operators that worked in that area that had never drilled but had done a good amount of work. 

We then put that together with the sampling and the mapping we had done, and we identified what we now call the Saddle target. That is a mile away, to give you some perspective, from where the old mine is. And that is a standalone independent target that's a lookalike to Los Gatos; similar type of geology. They’ve got the same geophysical feature we're looking at or that we have.

That really gave us confidence to continue to work that area, which we did, and that we think is completely independent of the focus we had at Las Coloradas at the mine. So, really, here we've got a double whammy… if you want to say that… that's going to become a priority target for us in this upcoming drill program. 

Gerardo Del Real: And so when you're talking about Los Gatos, you're talking about the same Los Gatos that was just acquired for nearly a billion dollars, if I'm not mistaken, right?

Scott Emerson: That's correct. That company was acquired by First Majestic Silver, who's a Mexican operator. And Mark Pryor, who is now on the board of Kingsmen, he recently joined here about three months ago. He was in charge of the underground development at Los Gatos and the exploration that was carried on. 

So we are fortunate enough to bring him onto the board of Kingsmen. He's now part of our technical team, and part of the decision-making process will be with Mark and Kieran Downes and the rest of the crew that I have. That's a big win for us.

Gerardo Del Real: That's a huge win. I think it speaks to, again, I've seen markets, bull markets, where, if all you had, Scott, was a shell and the team you've managed to put together, I've seen bull markets where that's a C$30 to C$50 million market cap without the asset just knowing the background and the experience.

For us to have the opportunity as shareholders to potentially have not just one but maybe two Los Gatos’s right here in the next several years, it warms my capitalist heart to know that the market cap, even after the robust performance in the market, is still a ~C$10 million market cap, folks. And we aren't waiting two years for permits; we have the permits. 

When will drilling commence? When do we put the ‘truth machine’ to it to see what's there and to see how far we're going to stretch this ~C$10 million market cap, which is what excites me.

Scott Emerson: I think, realistically, Gerardo, the truth machine, the drills, will be onsite by end of January, first part of February. That's what we are targeting just because of the holiday season. Really, Mexico shuts down on the 12th of December, or it slows down considerably, and they really don't come back to work until the 10th or 11th of January. And then, we'll re-mob, or we will mob… and by the time we get going, I think it'll be either the late part of January or early February. 

Gerardo Del Real: I'll share something that is highly ironic to me. As you know, I'm of Mexican descent; my mom and dad are both from the great State of Zacatecas, which is traditionally home, as you know, to some of the richest silver mines in the world. The way that that was discovered was the Spaniards brought over religion… and the joke amongst our family is that they took all our silver! 

But it's interesting to me that now we have to wait until late January because of the Christmas holiday and the New Years holiday… and what we're waiting for is to go discover some more silver — the silver that was left behind. So it comes full circle for me.

I couldn't be more excited as a shareholder. I want to get back to this target, the Saddle target, because you mentioned that, and we talked a bit off-air, but this could be its own separate project, right?

Scott Emerson: Correct.

Gerardo Del Real: This is a mile away from the Las Coloradas project. Explain to me the data that excites you so much about the Saddle target.

Scott Emerson: Again, I think that, on surface, what we were able to find and put together is you could see a conglomeration of a lot of high-grade silver on surface. So when I say that, it's not like we pick up one rock and we walk two meters and pick up another rock. This is over an area of 100 meters by 100 meters so it's quite a large area.

Then, what we did is we went to some of the past operators that had been there — and I'll mention Coeur Mining because they were there for seven years — they did ground mag, they did some sampling, as well as some mapping. We are then able to get that data with our own data and put together this picture from surface down. 

And that was where the excitement came from because Mr. Pryor, who's got — no pun intended — prior knowledge of the area, said, ‘Oh, there are some similarities here!’ And we've always said that we have similarities over the entire project area to Los Gatos or Santa Barbara, which are big mines in Chihuahua in the same State we are.

And then, once we were able to put that all together, we were like, ‘Wow, look at this picture we've created… just look at this!’ And then, we sent it out to others to basically confirm our analysis. And they were like, ‘Wow, that's a big target, and it deserves to be drilled!’ So, hopefully, that answers the question.

Gerardo Del Real: Absolutely… and we're talking silver-gold target as well, correct?

Scott Emerson: That's correct, yep, same characteristics. Again, we've got a double whammy here. As I said, our original target, we talk about 200 million ounce potential for that project area. And I'm going to tell you that, potentially, it could be far greater than that if this holds true.

Gerardo Del Real: Well, I couldn't be more excited. I can't wait for the drill bit to start turning. I hope you have a phenomenal holiday. I suspect you'll have consistent news flow here for the next several weeks and months prior to drilling. 

I know there's a lot of work going on behind the scenes to really ramp up the targets and make sure you're putting those drill holes where they belong. But, yes, I can't wait! I want to thank you for your time, and, as always, an open invitation anytime you want to come on.

Scott Emerson: Okay, thanks, Gerardo, I appreciate it!

Gerardo Del Real: Alright, Scott, thanks again.

Scott Emerson: Back to work!

Gerardo Del Real: Always! Cheers now.

Scott Emerson: Bye-bye.

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