Categories: Precious Metals
Topics: General Precious Metals

Magna Gold (TSX-V: MGR) CEO Arturo Bonillas on Building the Next Mid-Tier Gold Producer

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president and CEO of one of my favorite speculations in the mining and exploration space, Magna Gold (TSX-V: MGR)(OTC: MGLQF), El Señor Arturo Bonillas. Arturo, muy buenas tardes. ¿Como estas?

 

Arturo Bonillas: Buenas tardes, Gerardo. Great to hear you.

 

Gerardo Del Real: It's great to hear you. I know you're in Europe. Right, Arturo?

 

Arturo Bonillas: Oh, actually I'm in Mexico, but I'm representing the European bolts via a website with a London time.

 

Gerardo Del Real: Well, virtually you're in Europe, you're working off of London time.

 

Arturo Bonillas: Yep. That's correct

 

Gerardo Del Real: Excellent. Let's get right into it. You provided an update on the mine performance and an operational update for the ending of Q3 here ending September 30th, 2020. I would love you to provide the details. There's a lot going on. As I mentioned, exploration, development, you're processing fresh ore, and it looks like you're on track for 2021, a resumption of full mining activities, which is exciting.

 

Arturo Bonillas: Yeah, that's right, Gerardo. We are very happy with the progress that we have been making. The first five months since we took control of operations have shown a better than expected results and we will summarize it quickly. We've sold 12,408 ounces of gold since May. We have had a cash operating cost of $50.1 million and sales up to $22.4 million with an operating profit of $7.3 million with US.

 

So we are happy we have placed most of the operating profits back into the mine. We’ll be investing in much needed maintenance. And we also have put money back into developing the underground mine, which is looking better and better every time. We began pre-stripping both La Chicharra and San Francisco. So we're ramping up quite nicely, according to plan. And we have initiated the next phase of this ramp up, which is a very aggressive drill program, which is aimed at adding reserves to the San Francisco pit. We're not drilling here to explore, we're drilling to add reserves. We have a very aggressive plan and we should have a new mine plan updated early in the year, as I mentioned before. And I think we’re looking very good, Gerardo.

 

Gerardo Del Real: Arturo that mine plan is going to be very critical for setting the stage in 2021, because as I understand it, you're looking to improve the gold recoveries. You're looking to lower the cash costs, which of course is going to increase the profitability. And you mentioned that you're not looking to explore in regards to La Chicharra and San Francisco, the open pits there, but you are exploring at other properties. So first let's talk about the guidance that we're all hoping for in early 2021. And then we can talk about exploration, which as you know, I'm excited about because you're drilling. If I understand it correctly, the high grade silver La Pima target and you also have satellite deposits that it seems like you're contemplating bringing into the production profile.

 

Arturo Bonillas: That's right. So let's get back into separate deposit areas for the San Francisco mine, the producing mine, the target there is to add ounces as soon as possible to the current mine plan and have a new mine plan early in the year to drilling. And I'm talking here infill drilling of the San Francisco pit, Chicharra, and also the underground mines, which is giving us very good surprises in one area. We will have them the new business plan for next year, the beginning of next year, and the exploration areas we are drilling on La Pima, the silver targets, and I'll give results later when I'm allowed to give them to the public, but it's looking good. And we're also planning and not only planning, but we're very close now to begin preparations, to build a small process facility up at the Mercedes pit, which will generate sufficient cash to next year for self exploration.

 

Very, very interested in that very, very advanced. We have most of the permits. So we'll have another producer up in the mountains and that shall extend the orebody there in there as we keep drilling. So that's the other areas that we have on our organic pipeline of exploration and some coolers of San Judas with an amazing resemblance to the San Francisco, mine, the same district. We should also be doing that next year. So we're on target on, on all the areas. And also we keep looking and acquiring new properties. We have put together what will be a nice silver portfolio, exploration properties. We are announcing that soon. And the other projects that we will be acquiring in the gold and silver districts. So it's a lot going on.

 

Gerardo Del Real: With all of this activity, Arturo, what does the balance sheet look like? Because you don't have warrants outstanding. You haven't raised any capital for months on end, and it doesn't look like you need to.

 

Arturo Bonillas: Well, we maintain a stable balance sheet within the treasury. We have been relying on the operations of the San Francisco mine, which I said is performing very well. And we'll be putting money back into the mine. The balance sheet is fine, but we will probably need to raise some money later because we have a lot going on – many projects that you will see. It will be unfair to put all the weight on the mine. But no, we're good. We're happy and we will help sustain the operation and there will be self-sustaining or escalation properties also.

 

Gerardo Del Real: Excellent. And the way I understand it, as of September 30th, you had a consolidated cash position of approximately $11.2 million US, correct?

 

Arturo Bonillas: That's correct. Yeah. That's our cash position at the end of September. And we plan to maintain, if not increase that cash position towards the end of the year. Remember, we are ramping up a San Francisco pit and as we progress, we will have a lower operating costs. As we put more ore into the leach pads we will be reducing the cost next year substantially with the introduction of the underground mine, and because that'll lower the cost in the higher grades and also the economies of scale. And we expect to lose a larger mine plan which will also have an effect on our operating costs. So you'll be seeing that over the course of the next few months.

 

Gerardo Del Real: So to summarize gold, silver, exploration, development production, and just for fun, you're aggressive on the M&A trail.

 

Arturo Bonillas: You’re correct we continue on the trail.

 

Gerardo Del Real: Arturo, Thank you so much for the update. It was a necessary one. I'm excited to see things are on schedule or ahead of schedule in many instances. And I can't wait for the next update and results from the high grade La Pima silver target. Thank you so much Arturo.

 

Arturo Bonillas: Thank you. Have a great day.

 

Gerardo Del Real: Same to you.