Categories: Precious Metals
Topics: General Precious Metals

Mawson Gold (TSX: MAW)(OTC: MWSNF) Executive Chairman Michael Hudson on Quality Gold Exposure At a Significant Discount

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the Executive Chairman of Mawson Gold, Mr. Michael Hudson. Mike, we were overdue for a catch-up. How are you today, sir?

Michael Hudson: Always too long between drinks, Gerardo. Lovely to be back.

Gerardo Del Real: Well, let's get right into it. Mawson subsidiary SXG just intersected its third-best hold. The hits keep coming, 10.4 meters of 22.4 grams per tonne gold equivalent at Sunday Creek in Australia. People much smarter than I are already commenting that this will absolutely be a mine. There is some debate as to whether there is two million ounces or three million ounces that you can infer right now, but I suspect in the not too distant future we'll start being able to put a number around this discovery. But one thing's for sure, continuity's excellent. And boy, those grades. Congratulations to the Mawson team. Obviously, to the Southern Cross team. Can you give me a little bit of context on this latest release? And then let's talk about what comes next because if I got it right, there's still four rigs operating there.

Michael Hudson: Yeah, absolutely. Yeah, big systems have big footprints. We're drilling over an eight kilometer trend here. The main zone's over one kilometer where Mawson made those initial discoveries 18 months ago and spun Southern Cross out just over a year ago. We've gone through our first birthday as a company in Southern Cross. And four rigs drilling, about 25 kilometers total into this system. So it's relatively early days. You look at something like Great Bear, it had 300 kilometers in it. So the only thing this deserves is just more drilling rather than less, even though we've got the four rigs going.

This was the deepest hole on the eastern end of that main zone, an area in which we call Apollo, and it was a top-five intersection in Canada and Australia last week. And it's got very great grades, 18.6 meters of gold over 10.4 and 2.4% antimony, which is a key component. It's a critical metal. There's some very positive signs coming out of the Victorian government now around development of mining projects.

So it's all going in the right direction and there's always a lot of news flow from Southern Cross. I should say, just before I hand back to you, Gerardo, but it wasn't just that 10.4 meters, it was over a 300-plus-wide intersection that we saw mineralization. So there's five different high-grade structures of which I just gave you the best. So it was just one of those other knock it out of the park holes.

Gerardo Del Real: Absolutely spectacular numbers. What comes next? You mentioned the big footprint and how big systems leave a big footprint. How wide is the spacing on the drilling that you're doing now with the four rigs?

Michael Hudson: Yeah, so we've got three rigs in the main area and we've drilled it over about a kilometer of strike and down to nearly a kilometer, about 900 meters vertical. And there's gold from top to bottom and left to right basically. And the holes that we're drilling are still big step-outs. They're hundreds of meters. In general, we're drilling a few holes within the 30 to 50 meter range just to understand the continuity of the gold and make sure our model hangs together. It's a pretty well-defined model now that we have for the gold. It's a hundred-meter-wide structure that is the host and then across that. So that's like the rails of a ladder, and then across that the steps form very regularly. We're seeing very high grades at plus or minus every 10 meters in these veins that are the steps of the ladder, if you like, with the main zone being the rails. So it's well-constrained.

Our other rig is drilling between four and eight kilometers away on the structure, that hose structure where there were old mines. And there'll be some results that we'll start to see flow soon from those drill holes when we get them back from the lab. And its only limitation is drilling, like I said, that these systems demand hundreds of kilometers. And we're at the start of the journey. And you hypothesized and done some calculations in the back of your head there. But that's the kind of target that we're looking for. This is a multi-million ounce target and there's no reason to suspect that it's not going to be, in my view of the world. And the hit rate is globally-leading. There really isn't much better out there in the globe at the moment. There's some very good projects, but this is one of the better ones and certainly one of the best in Australia.

Gerardo Del Real: I couldn't agree more. Look, the high grade, the extent of the mineralization, all of that is the most attractive part to the average speculator. But if you scan down the release a bit, there's mention of a diagnostic alteration mineral that was encountered for the first time. And my non-geologist self would love an explanation as to why the company believed that to merit a mention in this press release and the significance of it.

Michael Hudson: Well, that's maybe just geologists being geologists. But it showed, it's a mineral called boulangerite, which is, or possibly boulangerite. We haven't had it diagnostically defined, but visually it could be two or three minerals with the same chemical formula basically, which is a lead antimony sulfur salt, which is diagnostic of these epizonal deposits. Now, that's a very common accessory mineral in Fosterville.

So it was really put in there to link and demonstrate that this later gold event, this later Devonian event in Victoria, that is Fosterville, that is Costerfield, two of the highest-grade gold mines on Earth, and Sunday Creek, all share the same genealogy if you like, geological genealogy, which is the same event manifesting themselves a little differently at surface.

But that is the reason why we're drilling such deep holes because both Fosterville and Costerfield transition from the top parts of their systems to these uber-high grades at depth. And that was around about 800 meters. And we're seeing that same transition. So standing in the shoulders of giants with those analogs. But Sunday Creek is growing up and pretty much stands by itself in terms of the drill results. But it's still important to understand the model and what is driving our strategy.

Gerardo Del Real: Also important to understand that there's several irons in the fire with Mawson Gold. It's not just the 51% interest in Southern Cross gold. Can we get a brief update on the other parts of the portfolio, Mike?

Michael Hudson: Mawson is a really interesting company at the moment. It's got a very good shareholder base, 60-plus percent institutional. That overhang that came from that private equity group that was looking to exit its position late last year is now gone. So the capital structure is tight. It's got this position in, it's got 93 million shares in Southern Cross. It owns 51% of Southern Cross, which on any one day exceeds the market cap of Mawson. And then to boot, Mawson has a million ounce gold cobalt project up in Finland that it's taken through PEA, north of 200 million NPV on that project, mid-to-high 20s IRR.

And it's a project that will benefit from a lot more drilling to basically add another half million ounces to that system to a million ounces, which we believe can come through step-out drilling. And then that will really change the outcome on what that PEA showed us is that we can really get the NPV up without increasing the CapEx and that will make a very viable project in our mind.

So we've got to look at finding ways to give Mawson shareholders the benefit of that Southern Cross position. It's escrowed until May next year, an ASX escrow. So the board will come to a conclusion on how that is best done, and then equally and separately how to create value in that project in Finland. So it's the sum of the parts absolutely exceeds the parts together as they're valued by the market.

Gerardo Del Real: Couldn't agree more with gold flirting with the 2,000 level again. I believe the second half of the year, we talked off-air, Mike, I believe it's going to be a very, very profitable one for companies like Mawson that are positioned with multiple assets in excellent jurisdictions and the potential for multiple multimillion ounce gold deposits. Anything to add to that, Mike?

Michael Hudson: No, I only hope you're right. And we know that these projects that are top tier will exceed valuations when the market turns, and so I look forward to that occurring. But in the meantime, it's our job just to find more gold.

Gerardo Del Real: Sounds good. We'll chat again soon. Thanks again for that update.

Michael Hudson: Thanks, Gerardo.

Gerardo Del Real: Cheers.

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