Categories: Precious Metals
Topics: General Precious Metals

Kingsmen Resources (TSX-V: KNG)(OTC: KNGRF) CEO Scott Emerson on Expanding High-Grade Silver via the Drill-Bit and Testing District-Scale Potential at Flagship Las Coloradas Project in Chihuahua, Mexico

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president & CEO of my largest personal silver holding. I’m talking with Mr. Scott Emerson of Kingsmen Resources (TSX-V: KNG)(OTC: KNGRF). 

Scott, it’s great to have you back on. I should mention that I believe you are also the single largest personal shareholder of the company. How are you doing today?

Scott Emerson: Hey, we’re good, Gerardo. We’re full-steam ahead.

Gerardo Del Real: Listen, I want to get into the recent results. I have a couple of questions as a biased shareholder about the results, but I want to start by commending you and the team because gold wasn’t always $4,600 with a lot of room to run. Silver wasn’t always $70 with a lot of room to run. It’s where it’s at now. 

Way back a few years ago, you came to me and to our mutual friend Jeff Phillips and a couple of others and said, “I have this great idea of consolidating all of these fractured land packages and putting together these precious metals districts.”

And we said, “Well, that’s great. Everybody has great ideas. Why don’t you come back to us when you get it done, Scott?” And all you did is you worked for many years and you put together not just one, Las Coloradas, which is the silver project we’ll talk about today, but two, the second being Almoloya, which we’ll see drilling later this year. And that’s a gold/silver project.

So you now have under your belt two precious metals districts in a raging bull market for precious metals. And you have ~C$15 million in cash. And somehow the market has decided that that’s only worth ~C$40 million today.

I suspect that rerating is going to happen swiftly and violently to the upside if you keep delivering with the drill bit. Congratulations on that front. Let’s talk recent drill results. You ready for me?

Scott Emerson: I’m ready. You took away all my thunder. That was a good introduction. Thank you.

Gerardo Del Real: No, listen, hopefully there’s more thunder. You released assay results from two additional diamond drill holes, holes 14 and 15. The headline number is 1.4 meters of 433 grams per tonne silver equivalent, of which 239 grams per tonne was silver at Las Coloradas. You’ve also gone to great pains in the release, I think, to explain the approach to the drilling.

You talked about the minimum strike length now of 106 meters and three drill fences that are spaced 50 meters apart to a vertical depth of 155 meters. I want to make sure that I highlight and emphasize to the audience that this has been a small part of the land package that’s being tested. 

And I want to start there. Let’s talk about the approach to the drilling specifically in these two holes here.

Scott Emerson: Sure. I think even to step back further, Gerardo, if the listeners can visualize it, the land package is three square miles by three square miles. And both Las Coloradas and Almoloya had past-producing historical mines on the claims. Why that’s important is because I always use the analogy, the best place to find a mine is where there was one. And for different reasons, Las Coloradas was mined from 1944 to 1952, and then it stopped mining.

That was because of the fragmented district. It was broken up and it’s had no modern-day exploration on it since that time. And for Almoloya, it’s even earlier. I say that because where we have currently just announced our drill results is a very small portion of the entire project area. It’s one target that we identified through 2025 drilling. We did a 3,000-meter program there.

Because if you recall, after yourself and Jeff Phillips and guys stepped in, we hadn’t drilled anything. Last year was really our discovery year, if you want to put it that way, where we not only drilled 12 holes, we had success in 12 holes, but we had it over a very large landscape, if I could kind of visualize it like that. Fast-forwarding to where we are today, we went where we drilled last year and had success in one hole. That was LC-10.

That was a high-grade hole. I think it was over a thousand grams silver. We stepped back there. We then stepped out on either side of that hole, if you can visualize it. And then we stepped out from that. 

I guess the best way for me to describe it to your listeners is if you take three vertical lines and you space them an inch apart on a piece of paper, think of three holes drilled in the middle line and two holes drilled to the north, or on the top line, and two holes below.

So now we’re able to outline a resource and we’re starting to understand the geology better. But that again is only in that mine area. We’ve subsequently stepped out a half a mile to what we call the DBD zone. 

Then we stepped out another half a mile to the Aguilar zone. And then we’ve stepped out three miles to what we call the Saddle target. Visually, I think for your listeners, you can think of it as this huge landscape.

We’ve only got 19 holes into the program so far. Again, the opportunity lies in, can we tie this all together and how big is this district? And the eye on the prize is to ultimately have someone, one of our neighbors — and we’ve talked about it, Gerardo, several times — come and say, “Hey, they’re onto something. We want this.” That’s my short answer.

Gerardo Del Real: I love the short answer. I’m going to play devil’s advocate here. I’ll be really honest with you. And even today with the stock up some 14%, your market cap is still just C$43 million. So when I look at that, I go, “Well, what is the market wanting?” And I’ll be honest with you, I think the market wants two things because it’s what I want as a shareholder. I want to see the step-out results.

I want to see what you hit half a mile away, one mile away, and I sure in the heck want to see what you hit two and a half to three miles away over at the Saddle target. If you come close to proving mineralization on minable widths — and that’s the second thing I want to see — over a mile, over two miles, over three miles, I think you’re off to the races, especially in this metals environment.

So the second thing that I want to see is I want to see true widths. And I know that this is something that several shareholders have mentioned to me. And something that I, internally, as soon as I’ve read the last couple of releases, I’ve said these 1.4 meters of 433 grams per tonne silver equivalent from 190 meters, very consistent with what was mined back in the days with obviously much lower silver prices.

But the one nagging question that I have is when do we start seeing the true-width aspect to be able to provide more confidence to shareholders that when we see 1.4 meters and we go, “That’s minable,” that we’re actually talking about 1.4 meters?

Scott Emerson: Gerardo, with respect to minable widths, again, if I can just kind of lay out a description here, think about the wall in front of you, and think about us drilling one hole at a 45-degree angle through that wall. 

Then we’re going to have to do a second hole, and that second hole, where it enters and where it exits, when we can measure the distances between those two holes, then we can get into true width. So the short answer is it requires more drilling.

Right now, we’re just trying to identify the geology and understand the geology. And you’re going to get into true widths here probably by the end of the year as we continue to drill these out. 

Again, hopefully that’s a simple explanation, but that’s how you look at true widths. But what I can tell you, because you hit on it, is we know that they mined up to a half a meter, a meter, a meter and a half back in the day.

We have those records, those historical records. So that’s what gives us the confidence to say, “Hey, look, are we going to be able to grow this?” And that’s what we’re proving out right now. And going back to your first question, those step-outs, those holes are coming. So stay tuned and you’re going to see a lot more results.

Gerardo Del Real: Well, again, I’ll go on record and say I’m highly confident that I think we’re going to see some good news. And I say that, one, I’m biased, but two, I say that because of the mineralization in the district and because of the fact that you’re seeing a lot of the same stuff at surface in those areas — and you correct me if I’m wrong — as the areas where, frankly, you’re hitting right now.

And it would surprise me. It wouldn’t have surprised me last year if we didn’t prove that the mineralization existed below the water table and that the continuity was there. It would surprise me now if all of a sudden everything on top kind of looks the same and everything on the bottom just completely cuts off. The drill bit will tell the truth on that. That’s why they call it the truth machine.

So what I think ultimately is irrelevant to the conversation. But I will say this, if the drill bit and Mother Nature prove up that there is a lot more of this stuff half a mile, one mile, three miles away, I think not only do you get a significant rerating higher, but I think the institutional support that you’ve received is going to step into the market in a really pronounced way.

And with the share structure that you have, which is amongst the best in the junior space, it could be fireworks sooner rather than later. How are the assay labs treating you? When do you expect to get more results on some of these step-outs?

Scott Emerson: I think we’re due for another batch of assays back in the next two to three weeks. That’s realistic because our last samples went in, I guess it was now three weeks ago. 

So that’s kind of the turnover that we’re seeing right now, is every six weeks we’re getting results. And I expect that we’ll get some more here in the next two to three weeks. So we’re going to have a pretty consistent news flow with respect to numbers and geology and what this is going to deliver to us.

Gerardo Del Real: The Saddle target, is that something you anticipate in the next batch of results?

Scott Emerson: Yes, I think the Saddle target will be in the next three to five weeks, somewhere in there. Because like I say, if you look at how they’ve sequentially given us results, we started with holes 13, 14, 15. So they are coming. 

And yes, it’s just something to look forward to. And in the meantime, we’re going to continue to do the work that needs to be done to basically lay out what it is that we have. Because again, Gerardo, we talk about the known targets, and that was through mapping, sampling, geophysics.

We’ve generated new targets since then. Just to give you an idea, we had crews in the field that were 400 meters from Aguilar, and we’ve got a nice surface expression, high-grade silver. That’s our drill target. Again, I think when you entered into this with me, we talked about having pretty consistent news throughout the year and having drill programs running. 

And that’s exactly what we’re doing. We’re executing as a junior company, and I think that’s important, and we’re delivering results.

Gerardo Del Real: Can’t wait for further results. Really can’t wait to see what, if anything, the Saddle target turns up. Again, it’s a different conversation if you hit good widths and good grade over at Saddle. And maybe a new type of mineralization. We don’t know. We’ll see what the drill bit delivers.

Scott Emerson: We don’t know because, again, that was something that was identified by a previous operator, which was Coeur, which your listeners will know the name. They were there for seven years. They never drilled it. They did a lot of work. And we took advantage of that when we entered the market post-COVID.

And that’s really the opportunity that I saw, that I presented to you, is I don’t think you could replicate what we’ve put together, whether it be at Las Coloradas or at Almoloya. These haven’t seen district-scale exploration like they’re seeing now. And we’re going to find out what’s here.

Gerardo Del Real: Happy shareholder. Let’s see how happy I am in the next three, four, five weeks. Thank you, Scott.

Scott Emerson: You got it, Gerardo. Thank you.

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