Categories: Precious Metals
Topics: General Precious Metals

Mawson Gold (TSX: MAW)(OTC: MWSNF) CEO Ivan Fairhall on Multiple New Discoveries, Drilling 30+ Gold Targets, Upcoming PEA and why Rajapalot will be an Exceptional Gold Mine

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today live from the 2022 Beaver Creek Precious Metal Summit is the CEO of Mawson Gold — Mr. Ivan Fairhall. Ivan, it's great to see you in person.

Ivan Fairhall: Absolutely.

Gerardo Del Real: How are you sir?

Ivan Fairhall: I'm very good. It's great to be here. Thanks, Gerardo.

Gerardo Del Real: I've been pounding the table about Mawson the past three, four, five, six weeks explaining to everyone that while gold is in a consolidation mode, Mawson has disproportionately suffered as far as it relates to its share price. And I think it's one of the better gold speculations in the space right now. 

There are a multitude of reasons. You have a 60% interest in Southern Cross Gold, which almost makes up the entire market capitalization of Mawson. You have a million gold equivalent ounces. You have an upcoming PEA that I think is going to come in north of C$100 million. You have exploration upside with a new discovery that you're going to drill. You have exploration upside on the million ounce gold equivalent resource and a cobalt kicker to boot. 

I could go on checking the boxes for people and telling it to everyone. I would love for you to make the case, Ivan. Tell me what's going on… then tell me what's about to happen.

Ivan Fairhall: Sure. Yeah, you're right. There is a lot going on in Mawson. We've got a great project there in Finland with tons of exploration upside; got an exploration property in Sweden. We've got this big chunky investment in Southern Cross Gold, which, as you say, underwrites the value of the company on its own. 

And so we are busy just taking each of those components and really focusing attention on how to extract the most value. So probably starting with the PEA, that's the real next main event that people can look out for. And this is the first time that economics have ever been run over this project.

Gerardo Del Real: And then, just to clarify the project for everyone… 

Ivan Fairhall: So yes, this is the Rajapalot Gold-Cobalt Project in Finland. And so that's up there. We've got this million ounce gold equivalent — that's gold and cobalt — and it's in northern Finland. And what we've got there is a mine, and that's why we're doing the PEA to explain this: What is the deposit? What have we found? 

We've actually found a mine already, and we'll come onto the exploration upside in a little bit. And so what people are going to get to understand is why this deposit makes a mine; what are the really great advantages of the project. 

The way that our ore body sits: the thickness of it, the way you can mine it, how much of it you can mine, how cheaply you can mine in that part of the world. And the great recoveries, the great infrastructure because of where it's located. No crazy roads, bridges; just a simple power line, 15 kilometers and a water line, no camps, people drive in from the capital city to the project. And that's what helps keep the capital costs low.

Gerardo Del Real: And you have community support for this.

Ivan Fairhall: Absolutely. They're banging down our door. And actually, one of the reasons to do the PEA is because we've started the permitting process already for the project and they want to know more and more and more. And the reality is you can't permit a project that you can't describe. 

So we wanted to do a starter case for the project to just show, ‘Look, this is what we've got and it already makes a mine.’ Now, what we're going to do is we're going to continue to explore. There is still so much exploration to do on the property; different types of exploration. And so the project will grow over time.

And so people need to understand that this PEA is the beginning of the opportunity here, not the end. Some projects, they do all of the drilling and they run out of ideas and they're like, ‘Oh well, I guess this is as good as it's going to get. We're going to go and turn this into a mine.’ We're doing it for other reasons. 

We're doing it to help move the permitting forward and to help demonstrate, as we find more ounces, how much value; you just load it up into that sort of economic case and demonstrate how much value you can create.

Gerardo Del Real: I've speculated in my back of the napkin calculations that that NPV in that PEA is going to come out somewhere around C$125M, C$150M, maybe even C$175M. We're just talking about this one project in Finland. What's Mawson's market cap right now?

Ivan Fairhall: C$41M. 

Gerardo Del Real: C$41M. So if I'm wrong and it comes in at C$125M, you're still getting it for a third of the value of the one project.

Let's talk Southern Cross Gold. What is that worth? You own 60% of that. It's one of the most exciting discoveries recently in Australia in one of the hottest addresses for gold exploration and mining in the entire world. What's that valued at?

Ivan Fairhall: So our stake in Southern Cross, and it's a controlling stake, 60% of that company is worth C$30M today. So Mawson's worth C$40M and the shares in that company are worth C$30M.

Gerardo Del Real: So again, if I'm wrong and it's not C$150M or C$175M for Finland, let's say it's C$125M and this is C$30M, well now we're at C$155M.

Ivan Fairhall: The mathematics are very compelling. There's so much value held up in this portfolio of assets that Mawson's got, which just makes the valuation so crazy cheap, but it also makes it obviously a buying opportunity.

Gerardo Del Real: You also have a new discovery.

Ivan Fairhall: We do.

Gerardo Del Real: Talk to us about that.

Ivan Fairhall: We've been busy. We acquired a new project down in Sweden back in January. And it was an outcrop in gold and we walked onto the property. We did some sampling to make sure we knew what we were buying and thought, ‘Well, what is the right way to explore this property. The gold is there; it's in the outcrop. Let's just go drill it.’ And that's the first thing we did; put some drill holes in; the target was already there. 

And we've got high grades; we've got 0.4 meters at 132 grams per tonne gold from the second hole we put into the project, and that's the second hole that's ever been put into the project. And this project exists 22 km from within mines that have produced over 7 million ounces; three operating mines there today, two operating mills, all within 22 km of the project. And so you just go straight in there and you just drill it and find gold. It had never been drilled before.

And so, we're excited about that discovery down there. There's lots more exploration to do. A lot more to find. It's early days but certainly onto something there. And I think it's because of where it's located with these mills around and mines that are sort of relatively low grade. 

And I think finding a deposit there would be a good fit in that region and may lower the hurdles to actually get a project developed if all you've got to do is develop a mine and you can send it to a mill that already exists.

Gerardo Del Real: I've ballparked at least C$175M to C$200M in value. The market cap is at C$40M right now. Let me ask you this: Do you think that Southern Cross, with its recent discovery — and mind you, there's multiple projects in Southern Cross; they are not a one-trick pony — but I’ve got to believe that you're excited about the exploration upside there and that you think that's going to continue to grow.

Ivan Fairhall: Oh, absolutely. This is just a point in time for Southern Cross. They've got plenty of funding. They're fully funded. I think they've got nearly AUS$7M. They've got two drill rigs turning constantly. I wouldn't be surprised if they added a third at some point. And the results just keep flowing out there. 

Every hole comes out with spectacular grades and wide intersections. And I think we're seeing that grow down deep and along strike… and that's just on the Sunday Creek Project. They've got other projects, and they just can't get to them because they've got so much that they're doing down at Southern Cross. 

And we read the news releases, and we're just blown away by the results that are coming out and are very happy shareholders at this stage. I think it creates lots of optionality for Mawson in the future in how we leverage the value that we own as part of that holding. But at this stage, we're just pleased to see them succeed and we benefit indirectly by virtue of our shareholding.

Gerardo Del Real: I know you believe and know that that 1 million gold equivalent ounce resource in Finland is going to grow as well.

Ivan Fairhall: Absolutely. So there's sort of two main components to the exploration upside that we're going to be working on in the next 12 months. And we put a little bit of news out around that, actually. But first of all, the main part — I call it the meat and potatoes exploration upside — is we've got this million ounce gold equivalent resource and it's open down deep. So all of the resource bodies that make up that deposit, there's just not enough drilling to find out where it stops. And some of the best holes, actually, in the project are the deepest holes in the project. And that's where it stops; it’s just because it hasn't been drilled to-depth.

So we need to demonstrate that the system continues; put some deeper holes down and show that this resource is just going to grow. So it's going to grow the deeper you go, and who knows where it ends. But we are going to show that just adding ounces to this project, you don't have to change the project — you just keep mining.

Gerardo Del Real: I’ve got to believe that has something to do with the thirty new gold targets you just identified, right?

Ivan Fairhall: It certainly has a bit to do with that! And that’s what I was talking about…  just in and around that resource is just a little postage stamp that’s part of a much larger land package we have up there in Finland. 

And remind people that have been following the story over a longer period of time that there's a discovery, originally, on one end of the property… sort of 6 meters at 617 grams per tonne of gold — like intense gold mineralization; its nuggety, and literally kilos of gold in samples. And then, we made the Rajapalot discovery over on the other side of the property; eight kilometers away in outcrop. That's where we found our million ounces equivalent and we believe that's going to grow; no exploration done in the middle.

We've got geochemical surveys that have highlighted a big till anomaly there where we've seen other till anomalies; we've found the gold that we believe is associated with it. This is something that hasn't been followed up; four by four km area; 30 targets that have been identified doing some really detailed mag survey and some structural interpretation. And this structurally defined target is where some of the biggest projects in Finland have been created and found.

And so we've got our work cut out to get across all of those targets. We're already out in the field doing more geochemical surveys to try and narrow in and find out which are going to be the best ones to drill.

Gerardo Del Real: Wonder when we’re going to see that PEA to see if I'm right about my calculations… 

Ivan Fairhall: Should be out in about a month… so we're getting close.

Gerardo Del Real: Fantastic! Ivan Fairhall, Mawson Gold, everybody.

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