Latin Metals (TSX-V: LMS)(OTCQB: LMSQF) CEO Keith Henderson on a Catalyst Rich 2024


Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the President and CEO of Latin Metals, Mr. Keith Henderson. Keith, how are you today?

Keith Henderson: I'm great, thank you, really great.

Gerardo Del Real: Well, listen, let's get right into it. You, myself and my partner, friend, and colleague, Mr. Nick Hodge had a pretty in-depth meeting the other day that lasted some-40 minutes or so, and it was really a catch-up being that we're shareholders and being that we cover the stock in a couple of the different services that we manage, but we had a pretty in-depth meeting to get an update on the status of several projects.

I walked away from that meeting really, really excited about 2024. We had expected multiple drill programs in 2023. There were delays all across the industry. I mean, whether it was in the lithium space due to fires, in the gold space due to everything taking longer than it should have. But there were definitely some expectations for drilling this year. What I came away excited about was the quality of the projects and the fact that though the drilling was delayed, we’re going to get it in 2024 in various ways.

My other big takeaway from that conversation, Keith, was the scale of some of these projects. And one of my good friends in this business is Mr. Michael Hudson of Mawson Gold and Hannan Metals fame. And I remember having a conversation with him when Mawson was sitting at 52-week lows and we had a similar type conversation, and I walked away from that meeting at that time feeling really good about the scale of the projects that he had in Australia. And sure enough, they made a massive discovery through their 51% subsidiary, Southern Cross Gold, and the rest is history. They're trading at 52 week highs or near 52-week highs.

I say all of that to say you have projects of significant scale. You also have some advanced projects that have already had some great drill holes. And so despite the share price and the $5 million market cap, I'm incredibly excited for 2024 as it relates to Latin Metals, and I think it's one of the better gold, copper speculations in the space. So I wanted to have you on just to talk about some of those projects.

Keith Henderson: Yeah, we're finding a tremendous amount of interest right now just because we're in Argentina. The change in government in Argentina, the new president, as you may have been following, when he was campaigning, was frequently on the stage with a chainsaw representing the fact that he intended to seriously cut government spending and saying, "Look, this country needs some radical change in order to get it back on track to get inflation under control.” And he won the election. And lo and behold, he's pretty much doing or starting to do very quickly all of the things that he said he would do.

And so that just triggered a whole bunch of phone calls from sources, some of whom I'd never heard from before. And the reason for those calls is they're looking at Argentina going, "Okay, this is for real. Something's going to happen here. Where can we get exposure to Argentina, like let's say on the royalty side or on the prospect generator side?" And there's not a ton of options and so we've got a whole bunch of attention because of that and it's really, really been good for us.

Argentina is just so interesting right now. Right after the election results, revenue-generating companies in the oil and gas space in Argentina saw themselves lift 17 to 20% in a couple of days based on that election result. The peso has just being devalued 50% against the US dollar. This is really radical stuff. And the IMF, the international financial community are like, "Well, this is great. This is exactly what this country needs to get back on track and wow, we're fully supportive." And so yeah, when was the last time the IMF said something positive about Argentina? I'm guessing 1952 or something, it feels like.

Gerardo Del Real: Yeah, I agree with you.

Keith Henderson: So this is great. So here we are. We're in a country that's going to see a tremendous amount of incoming investment.

We've got some fabulous projects. We've got a project partnered with AngloGold Ashanti, which we fully expect to see drilling there in Q1 2024. That's a little later than we expected but Anglo have moved that project forward this year. They've completed an airborne survey, and let's see what Q1 brings. Hopefully, we see some news releases in the early part of the year announcing drilling starting.

Two other projects of note in Argentina. One was with Barrick until recently, and we've got notice from Barrick that they're walking away from that project. That is not as negative as it sounds, actually. It's a somewhat unrelated event and somewhat unrelated to the project, and I fully expect that we'll be able to get a partner and quite a senior mining partner into that project in the early part of next year, so this is good.

And this is part of what we do, Gerardo. This project had five or six rock samples on it when we gave it to Barrick a couple of years ago. It comes back to us with a full mag survey done with lots of detailed mapping for lithology and alteration, eight drill targets established, and here we go. And the drill permit itself is in process, and we should finish that off now and we'll get a partner out to it and we're done, off you go. And now you're getting a deal that's worth so much more than the first deal you did with Barrick, and you get another partner in and everyone can see that this project's got value, and hopefully with the drill permit in hand, moves quickly to drill testing as well. So that's the second project.

The third one is probably the most interesting, and we've talked about this a few times, it's our Esperanza copper gold project. And that's a project where Latin Metals itself actually drilled a tremendous hole back in 2018. And apologies for repeating the grade, but it makes me so happy, I'm going to say it anyway. 357 meters from surface, 0.57% copper, 0.27 grams per tonne gold open at depth. There's a real discovery hole. And at the time, as you probably remember, that was a very significant hole in terms of global standards and it was the third best hole in Q1 2018. So that's a real discovery.

It's a real porphyry project. It's outcropping, which it's really unusual to find an outcropping porphyry system like this that hasn't been fully tested by drilling. And so we have our hands on one of those and we're very happy about it. So that's been the subject of our recent news release.

And as you might remember, that was optioned out to Libero Copper. We're in very, very difficult market conditions, and unfortunately Libero found themselves in a position of being unable to make a critical payment to us, which was 350,000 US dollars. And so yeah, unfortunately for Libero, that's a termination and that's the end of our agreement with them.

So we have our property back, and so we move forward now to try and complete the drill permitting that was ongoing and to try and get a new partner for that. And with these kind of grades, I think that's going to be something that should be kind of easy.

San Juan's one of the top mining jurisdictions in Argentina. There's all kinds of operations and discoveries and excitement in San Juan. The government's right behind mining. The new government is very pro-mining.

And Libero had moved us a significant way down the drill permit process. I think there's only a couple of signatures left that they need, so we'll be able to pick that up. We'll be able to finish it off. We'll be able to find a partner, I'm quite sure of that. And that one goes out and hopefully for drilling in 2024, as well. Because with drilling, this project is 100% ready for drilling. There's nothing else to do. And so the deal that I do, it will be a drill-based kind of deal.

So that's the story. It's hopefully three projects that get drilled in 2024, and that's roughly where we were last year. And we've seen delays in our projects and that's frustrating for the company, it's frustrating for management, it's frustrating for shareholders, but here we are. We're still in the same position. It's still tremendously good value. It's still trading at levels below what we'd like to see, particularly in these very negative markets, and hopefully people might view that as an opportunity.

Gerardo Del Real: Speak to me about how you've been able to manage dilution. You mentioned how tough the markets have been for so many juniors, specifically the explorers. You've been able to do a really, really good job managing dilution and making sure that you keep shareholders in a position where when you make a discovery of significance that is advanced, you're going to get the appropriate market response. Can you speak to that a bit?

Keith Henderson: Yeah, absolutely. I had a bit of a look at this a few weeks ago because it's interesting. You look at these markets and the general conditions and you think, "Well, how have we done in the last two years?" And I think we've done great. We've had investment from AngloGold, from Barrick, a little from Libero. In total, in less than two years, we've had about $5.5 million of investment coming into the company, either as cash payments or investment in the ground. If you look at the prevailing market conditions, share price and everything else over that period of time, if we'd gone out and raised that money ourselves rather than having it invested by partners, we would've diluted shareholders by 75%, and that's huge so we haven't done that.

That's our model, that's our commitment to the extent that we can do it. And I think for everyone that's already a shareholder, that's a really great result. It could be better. We would love it if we'd completed the drilling, but nevertheless, everything's moved forward. Cerro Bayo has gone from just a few samples on the ground to having drill targets, everything moves forward, ready for the next stage. We have not diluted the company, and I think that's just great.

Gerardo Del Real: What comes next? We have to talk Argentina. You mentioned Argentina. Can you provide the scale on that project? I mentioned Michael Hudson and Mawson Gold and the stock at one point being at 52-week lows and me walking away thinking, "Man, if they make a discovery there, it's going to be significant." Because of the scale of that project in Australia, you have a massive, massive land package. You're also modeling a new type of mineralization for this part of the world, which is pretty groundbreaking. Can you speak to that?

Keith Henderson: Yeah. So there's a type of copper mineralization, broadly speaking, known as sediment-hosted copper. The deposit type is most famously in very large-scale belts in Central Africa and in Europe, in Germany, Poland. About 23 to 25% of global production comes out of this deposit type, and yet it's relatively unknown to investors who are mostly thinking about porphyrys. In fact, most exploration companies are thinking about porphyry systems and they forget that this type of deposit, if you can find it, it tends to be very extensive, laterally. It tends to be very big tonnage, and it tends to be relatively high-grade, certainly relative to porphyry systems.

So we had the idea last year that a part of Salta might have potential for this kind of deposit. When we went to go and look into that a little bit further, we found that yes, we believe that the potential was there, and we also found that apparently either nobody else had ever thought of it or certainly nobody else had ever acted upon it, because all of the property we went to acquire was basically available for staking.

So we have now got a little over 500,000 hectares of ground, which is a pretty big area. If you want to think about acres, that's pretty close to being 2 million acres. It's massive. It takes many hours to drive around these properties. And for us, it represents a little over 90% of what we think the prospective ground is in this belt.

So we are first mover advantage, absolutely massive land position. We're looking for a target that tends to be kind of big, where it's found to exist, tends to be high-grade. In other words, absolutely perfect for a major company partner, which is the kind of partners we like to attract.

We love this project and so we're going to really focus on it. What we've done this year was basically the first steps. We went into part of this project, we covered about 60% of one of the four projects with stream sediment sampling, we're waiting for the results. We've taken a bunch of rock samples, we're waiting for the results. But we also know we've got mineralization. It's not difficult.

We've already put a news release on grade up to 2.5% copper, and we've since found a bunch more rock that's got that kind of copper mineralization visible. So we're expecting that when we get the results, we'll be able to put out news on this and say, "Well, here's the sampling we've done. Here's some of the grades that we're getting."

And this just puts us basically in a complete proof of concept. You go into a project like this and you make a financial commitment to acquire all of this ground and you don't really know how it's going to turn out, but now we kind of do. We've been able to put out news releases with this kind of mineralization. It proves that we're correct and it proves that our thesis that this entire land package is potentially hosting these kind of copper deposits is real.

And so the plan for next year is to focus on this. We're going kind of big on this because we really like it. So we're basically planning a five to six-month program in the first half of the year. We've divided the huge property into drainage basins, and we're basically going to take about 1,500 drainage basin samples, stream sediment samples, that will effectively screen the entire property. We're looking at acquiring some hyperspectral data from satellites, also looking at some other geophysical methods.

So we want to get to the end of this six-month period and have an absolutely compelling story, and we can walk into major company offices and say, "Look at what we've got. We've got all of this evidence. We've got all of these results. We're focused now on these high-priority target areas." And most importantly, we've got all the property. There's no other property available in this belt.

So if this is interesting to any of the major companies or mid-tier companies, they basically have to come and talk to us, and I think that's really truly valuable. And we know this is interesting to big companies. Big companies look at this stuff all the time. And that's why I was careful to say that we're not necessarily the first people to think about it, but we're certainly the first people to act upon it.

And you mentioned Michael Hudson, his company Hannan in Peru is basically looking at exactly this thesis. They've acquired also a very large area of ground, which they think is prospective for sediment-hosted copper. They've done the same as us, they've proved that it is. They've come up with mineralized samples. In their case, they're a little bit further down the track, and they've attracted a huge amount of investment from JOGMEC. And so this speaks to exactly my point. This is going to be very, very interesting for very big companies, and that's exactly the kind of project that we want to generate.

Gerardo Del Real: Well, it's going to be an exciting 2024. I mentioned the delays already, but it sets up for what I think is going to be perfect timing. As I see gold hitting new all-time highs, I think a copper deficit of significance is likely to materialize in 2024. You're positioned well on exposure to both of those commodities, Keith. I know this went a little bit long, but I thought it was important to get an end of the year update for everybody. Anything to add to that?

Keith Henderson: No, not really. I just think we're so well-positioned both with respect to the more advanced projects like Esperanza, projects that are ready for drilling like Cerro Bayo and Organullo, large-scale, high-potential projects that while they're at an early stage, we're going to be able to advance in the next year. And we're not dependent on any of our partners in terms of advancing these sedimentary-hosted copper projects, that this is within our own hands. We can get this work done. In six months' time, we're going to have a hell of a story to tell. But yeah, we're just really, really well-positioned, and here we are suffering the same fate as all the other companies.

Gerardo Del Real: Yeah, I was saying I suspect we're not going to be at these levels in six months' time, so I'm really excited to see what that looks like.

And again, thank you so much. Looking forward to 2024. Have a great Christmas holiday, New Year's, whatever it is you celebrate, if you celebrate. And I'll see you hopefully on the other side of this year. Thank you so much, Keith.

Keith Henderson: Great. Thanks. Same for you and your family. Take care.

Gerardo Del Real: Thank you. Cheers.

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