KORE Mining (TSX-V: KORE)(OTC: KOREF) CEO Scott Trebilcock on the Assets & Process for 350,000 Ounces of Annual Gold Production in California

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO of KORE Mining — Mr. Scott Trebilcock. Scott, how are you this morning?

Scott Trebilcock: I'm great. Thanks, Gerardo. How are you?

Gerardo Del Real: I'm well. You and I have been in this space for quite a bit. Me, a bit over a decade coming up on 13 years now. I know you have a history in the space and, oftentimes, the best stories are simple stories. KORE Mining is a very, very straight forward story for me. 

It's got great assets. It's got a great team. It's got great shareholders, and it's aligned with shareholder interest with a lot of insider ownership, which I always look for. So I want to get into all of that. But before we do, can you tell us a bit about yourself for those that aren't familiar with your track record of success?

Scott Trebilcock: Great! Well, the last nine years I spent building up Nevsun Resources, which built a mine in Africa; ran the M&A that eventually bought a great little company with an incredible copper asset called Reservoir Minerals. Shepherded that into construction, and then spent a year defending the company from a hostile takeover from Lukas Lundin, which led to a big dust-up and auction for the company. 

And I think in the end, we sold the company for $1.8 billion. So it was a great outcome for shareholders. And that was in a tough market. In a good market, I think we could have knocked it out of the park even more. But certainly, coming from that experience in ending in a base metals company, I wanted to stake my next success in the precious metals sector. And I'd loved the ounces in the ground and portfolio at KORE. And I joined about 20 months ago… so it's been a great ride.

Gerardo Del Real: Excellent! Tell me a bit about the team that you've managed to put together. Some names that I'm very familiar with, amongst those, Adrian Rothwell and a few other ones there; Brendan Cahill, Don MacDonald. I'll let you tell the team and how you were able to bring everyone together.

Scott Trebilcock: Yeah, that's great. I joined KORE, which was founded by Adrian Rothwell, as you mentioned; he's an ex Goldcorp executive. The executive chairman and second largest shareholder, Adrian's partner on founding KORE, was a great Canadian geologist who made his net worth in the oil sands construction materials business. So basically, the geologist that found sand and gravel deposits and made a ton of money… moved to Vancouver… founded KORE with Adrian in 2017. They bought the great asset portfolio that makes up KORE.

We've got an independent board made up of mining CEOs; Adrian; Don MacDonald, running NorZinc. Brendan Cahill; great reputation running Excellon Silver Company, doing a great job over there. And then, an excellent Macquarie banker who's a big investor in all of the deals in Vancouver, Harry Pokrandt.

I came in; I own about 4% of the company and brought in a key executive named Mark Leduc. Mark is a lifetime heap leach mining engineer; incredible guy, lives in Denver, Colorado — got a deep network in the US developers and engineering sector. And most importantly, he did the Castle Mountain mine for Richard Warke over at NewCastle Gold and configured such a great project there and got it permitted in California and got it sold to Equinox in 2018. 

So we hired Mark and said, "Mark, come do the same thing at KORE; put our project on the right track to be a mine, and let's see if we can attract a takeover through the cycle here."

Gerardo Del Real: I did well with NewCastle. I suspect I'm going to do well with KORE. You are looking to develop a pipeline to 350,000 ounces a year of gold production. Can we get into how that's going to happen in the flagship assets there?

Scott Trebilcock: Yep, absolutely. So KORE has a stake in two projects in California with 3.9 million ounces combined in the ground. The flagship is the Imperial project. Imperial is a technically, very well advanced 2.2 million ounce oxide deposit. 

Mark has engineered a great mine plan around it that'll deliver 150,000 ounces per year of gold. And in the second and third year, mine life will get up to the 200,000 ounce per year gold. So this is a real significant gold mine in the US gold sector. That said, it has incredibly low capital intensity because this is an at-surface, simple metallurgy heap leach gold mine. 

The second project in the company has 1.7 million ounces. We've also put a great mine plan around that project. However, that project is open for growth. So our next steps there is that we're going to go drill more ounces and increase that mine plan. And maybe even we can do better than that combined 350,000 ounce production number if we're successful with the drill bit.

Gerardo Del Real: Walk me through the market cap right now because I'm looking at the projects. And if I look at the Imperial PEA, the internal rate of return is 52% with a C$643 million NPV; that's using $1,600 gold. If I look at Long Valley, it's C$389 million of net present value at $1,600 gold with an IRR of 48%. 

Can you explain where the market cap is today because I think that highlights the opportunity, right?

Scott Trebilcock: Yeah, exactly. The market cap today is about C$90 million compared to that billion dollar value. So that's the reward scenario for KORE; investing capital in our projects. We want to take KORE to a billion dollar company by unlocking the value of these projects. 

And I think what's even better, and what attracted Eric Sprott to the story, was that we were able to go out and secure district scale exploration positions around these projects. So we're not hemmed in by someone else's claims or fighting for land in some crowded district. We control, in the case of Imperial, 21,000 acres around our project of highly prospective ground in a gold belt that hosts 12 million ounces of gold. 

So we’ve gotta go out there and make some new discoveries and make that target even better and bigger.

Gerardo Del Real: You mentioned making new discoveries. Let's talk about the drilling program and the upcoming catalyst because there's multiple, right?

Scott Trebilcock: Yeah, exactly. So we're currently permitting two significant drill programs; one at each project. At Imperial, we’ve got 150 drill pads in the permitting process. We're expecting to get a permit there in the middle of this year. Those pads include stepping out multiple kilometers from our deposit towards the operating Mesquite mine. 

And that's a mine that's in the same county in California that's currently being operated by Equinox. And we're going to be drilling targets right next to their mine… sort of waving up to the heap leach pad operators that they're buying. And if we can make a discovery there, that's going to create some real interesting dynamics for KORE.

Then, those pads include going all of the way across that belt towards our intact deposit and eventually doing some step outs from our resource. So we can not only make new discoveries, but with that drill program, we can also increase the resource at the known Imperial deposit. 

Up at Long Valley, we're permitting a 15,000 meter program. We are expecting permits here to start drilling in late-Q2 of this year to just simply grow the resource. We've got that PEA that shows that incredible value but the deposit is wide open for growth. So we're going to add more ounces and make that NPV even greater over time.

Gerardo Del Real: How is the infrastructure to the projects?

Scott Trebilcock: It's all there. Each project is located… yeah, not to be trite, but that's the beauty of operating in the United States, right? The United States is an incredible mining jurisdiction because, in general, there's good roads to almost anywhere. 

Both of our projects are located within driving distance for employees to come to work. So you've got educated, good workforces. In fact, at the Imperial project, you've got an operating mine 9 miles away at Mesquite with 400 well-trained employees. We've got water at both sites. You've got access to power close by at both sites. 

So that's the beauty of being in the United States. The infrastructure is just incredible, and you've got a large labor pool to draw from. So we're in great shape for low cost mining because of that access.

Gerardo Del Real: Excellent! How's the balance sheet looking?

Scott Trebilcock: Balance sheet; we've got C$5 million currently. So right now, we're making sure we can serve that balance sheet because the gold sector is going through a little soft period here, and you’ve got to make sure you conserve your balance sheet through that time. 

But when things pick up in the back half of this year, we're going to make sure we're generating lots of news flow to benefit our shareholders. Everyone likes to see the stock moving with the gold price, and we're going to make sure that that happens in 2021.

Gerardo Del Real: Well, I see you managed to capture the attention of Mr. Eric Sprott, who, I think, has a bright future in our industry (laughs!).

Scott Trebilcock: No kidding!

Gerardo Del Real: How many shares does Eric own?

Scott Trebilcock: Eric owns 26% of KORE. He has invested three times at progressively higher prices, and he's been the sole funder of the company to-date. So 26% ownership; we're really excited to have Eric on board. He loves the fact that we put money into the ground and put his money to work generating shareholder value. And we've got to keep doing that in 2021.

Gerardo Del Real: How's the share structure look? I think it's 106.2 million shares outstanding and almost 118 million fully diluted. Is that accurate?

Scott Trebilcock: That's bang on. Management and the board own 38% of that. So when you top that up with Eric's — 64% of the stock sits with strategics and insiders. And that, in an extreme way, aligns us with the important things for creating value for the per-share-for-the-shares, right? We're putting our money into the ground, into projects, not into our pockets — and it's all about per share value creation.

Gerardo Del Real: Well, I think KORE is going to have an excellent 2021. I think at these levels, it's a heck of a speculation. Again, simple story; a lot of value, great team. Looking forward to the drilling. Anything else to add to that, Scott?

Scott Trebilcock: No, no. I just want to thank you for your time and interest in the KORE story. I think as a solid US explorer and developer, there's a great shareholder market we've not yet tapped. KORE is a very young company, and we're excited to get out there and tell people our story.

Gerardo Del Real: Excellent! Well, looking forward to having you back on. Thanks again, Scott.

Scott Trebilcock: Thanks, Gerardo. It was great!