Mawson Gold (TSX: MAW)(OTC: MWSNF) CEO Ivan Fairhall on Mawson Subsidiary Southern Cross Bonanza Grade Hole & Catalysts for 2023


Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO of Mawson Gold, Mr. Ivan Fairhall. Ivan, great to have you back on. It's been a busy year. How have you been, sir?

Ivan Fairhall: Been very well, very well, and lovely to end the year on such good news that we put out today.

Gerardo Del Real: Well, let's get right into it. I mentioned it's been a busy year. You have a phenomenal project that's a hundred percent owned that delivered a PEA with an after-tax net present value of over $211 million US. If that was all you had, you'd be very undervalued, but you also have a roughly, and it might have changed here recently, but I think it's just below 60% holding in your subsidiary in Australia, Southern Cross Gold, which just announced the last portion, the last third or so of hole 50. And look, I told you off air, the totality of it is one heck of a hole. I'd love for you to provide the context because I'm not going to do it justice.

Ivan Fairhall: Look, absolutely, it is a really phenomenal hole and I think it's really groundbreaking for the project, and it encapsulates what Sunday Creek is really all about in one hole. And it does that because it was such a long hole and it went through really all the important parts of the story.

So what we released there today was the final third of the hole that had not been assayed and released. About three weeks ago, we released the first part of the hole and that really captured everyone's imagination, and good to see Southern Cross has released the results of the lower part of the hole and just more mineralization. The hole kept going because the mineralization kept being hit. And that's four new mineralized sections. A couple of them really stand out. Nine meters at 7.3 grams a tonne gold equivalent, four meters at 8.8 grams a tonne gold equivalent. So these are really minable zones, good thick mining areas with excellent, phenomenal grades, really phenomenal grades. And the additional zones that have been hit mean that this hole in total hit 16 areas of over 20 grams a tonne gold only.

Gerardo Del Real: It's ridiculous.

Ivan Fairhall: 16 separate sections. And that was a half a kilometer between the first and the last. So that gives you a bit of a sense of the scale of this project down dip. And I think probably also importantly, hitting 13 different vein sets along the way, what really makes this exciting is clearly it's continuing down dip. This was the deepest hole on the project by another 280 meters. But the more vein sets you find along the strike, the more the compounding of the scale of the project becomes, and the better that is from a mining sense. So for every meter you decline down, you'll be able to move across into multiple zones. And so it just becomes much more efficient mining area. So to see multiple zones as well as them continuing to the depths that we're seeing here, that's really what's making this exciting.

Gerardo Del Real: Let me ask you about something else that has me excited, and I don't know how many people caught it, but there's a part of the news release that talks about the change in temperature within the system observed in hole 50 and that the typical transition in the best, most robust kind of deposits in Victoria always transition in this shape and manner. Can you explain that to a non-geologist person like myself and a good bulk of our audience I imagine, and why that's important moving forward?

Ivan Fairhall: Well, I can try because I'm also not a geologist, but as it's been explained to me, it is a very exciting development. It's got the geologists mouths watering a little bit because what they have seen is the style of mineralization is changing and transitioned away from thinner, quartz carbonate veins that had varying but relatively high proportion of antimony. And what they've seen now in the lower sections in the hole and as they've gone deeper down the stratigraphy, is wider zones of quartz carbonate, up to a meter, and practically no antimony.

And the reason that they're getting so excited is where that has happened at these other epizonal projects in Victoria, is where they started to get very high grades of gold and where they started to get really bonanza areas of their mines. And these are not just projects, these are operating mines. Fosterville which is owned by Agnico Eagle and Costerfield, which is owned by Mandalay, another TSX listed company. And these are among the highest grade gold mines on earth that are operating.

And so to see this transition is I suppose, not completely unexpected, typical for epizonal projects in this part of the world. But also a signal of the better parts of those other ore bodies. So the potential for this to really improve at depth is certainly increasing, and that's what I think's making everyone so excited.

Gerardo Del Real: When it was first announced that the Sunday Creek project was going to be drilled, I remember interviewing chairman Michael Hudson a few times and joking with him off air that it'd be a lot of fun to play a drinking game every time he referenced Fosterville-like targets. And here we are, fast forward some nine months later and you can absolutely make the analog now and it absolutely applies, and I can't wait to see further results from the Sunday Creek property.

I think it's important to note that there's other projects within that portfolio that have a lot of merit on their own accord. But at this point, obviously, Sunday Creek is getting the bulk of the attention and rightfully so, anytime you have the kind of hole that we had here.

You and I talked a bit off air, Ivan, and not to cut you off, but we talked a bit off air about what comes next and how excited we all are for Mawson in 2023. So I want to let you respond to my comment about Fosterville-like and the analog and how applicable it really is now that geology's bore that out thus far. And then let's talk about 2023 and set the table there.

Ivan Fairhall: Oh yeah, look, I think I'd agree that the Fosterville analogs are increasing with every bit of data the guys get, and that is justifiably a reason to get excited. And in terms of a drinking game, I suppose you wouldn't want to be on the receiving end of that because it's certainly the word that's on everyone's lips. And in terms of results to come from Southern Cross, I mean they recently just raised $16 million, so they've got a really full kitty. And the intention is to aggressively drill this project and expand out the scale of the deposit, do more holes like this deep drilling to demonstrate the kind of quality that you see at depth, more holes along strike to find more of these vein sets. And like I mentioned, have the ability to compound the scale of the project by adding veins and being able to project them down dip. And that's really what's going to make it economically a very attractive potential mining project.

Even after the capital raise, Mawson still owns 51% of Southern Cross. And those shares that we own today, right now, have a market capitalization, you can look it up on the screen on the ASX, it's a trading company. They have a market capitalization of 68 million Australian dollars, so that's over $60 million Canadian. Mawson has a market cap of 50 million Canadian.

So you're getting a 15%, 20% discount on Southern Cross shares by buying Mawson today. And talk about free set of steak knives, we'll throw in a million ounces in Finland that has a Canadian $300 million NPV, which is just absolutely phenomenal, and the asset backing for Mawson in buying shares around the price today is a very, very attractive investment opportunity for people to take a look at.

Gerardo Del Real: What catalysts do you foresee in the first and second quarters of 2023 on the Mawson flagship side?

Ivan Fairhall: Well, yep, we've done a bunch of geochemical surveys and so the results from that are pending. So what we're looking to do there and what the survey has looked at, and we've talked about this before, is again on our project as well, expanding the mineralized footprint. Where are there more of these deposits now that we've got a project that is very attractive on a standalone basis? The incremental value you receive from finding more ounces and being able to add into that project, the capital stays the same, more or less. And so adding ounces, either extending mine life or maybe you scale up the project a little bit, but the incremental returns are huge from finding more. So we're focused on demonstrating that our property in Finland has a lot more to give and we've started with geochemical surveying and we expect to follow that up with base of till drilling.

There's a ton of targets on the property, anomalous gold all over the place. And that's in addition from base of till and boulders and all sorts of things. We just find gold everywhere and we haven't tracked down the source of it. And that's separate from obviously the million ounces that we've already found. And don't forget, very high grades over at Rompas on the other end of the property. So a lot of gold in the region. And really it's about finding where are the additional deposits that we believe are there in that very large area. And then there's also the potential to demonstrate the mineralization extends at depth. All those deposits are open, so it's a matter of well, how far does that go? And so we would be looking at potentially drilling holes, some down dip as well. But we're just working through our exploration plans there.

So more exploration to come at Rajapalot, permitting of the project. The PEA allowed us to start that and we intend to continue that process and actually go through the next formal gate, which is really great to just be engaging and move that project forward because projects take time to permit all over the world. And we've already started because that's our intention is to demonstrate that this project can be built, and just moving the project forward. We've got a great base case to build on with the PEA and yeah, look to add value as well as de-risk things that are related to the project, now that we know what it looks like.

Gerardo Del Real: It's a lot of very high quality gold exposure going into what I think is going to be a 2023 where gold finally really breaks out. Ivan, thank you for coming on. Thank you for that thorough update. Enjoy the holidays and we'll likely be chatting on the other side of this year.

Ivan Fairhall: Thank you, Gerardo. Great to speak and happy holidays to you too.

Gerardo Del Real: Thank you.

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