General Precious Metals
Mawson Gold (TSX: MAW)(OTC: MWSNF) Executive Chairman Michael Hudson on Additional Hundred Gram Meter Intersections at the Sunday Creek Gold Project
Gerardo Del Real: This is Gerardo Del Real with Resource Stuck Digest. Joining me today is the chairman of Mawson Gold, Mr. Michael Hudson. Mike, how are you today?
Michael Hudson: Top of the world down under, thanks Gerardo.
Gerardo Del Real: Well more news out of Australia. More spectacular high grade hits from the Sunday Creek project. I'll let you provide the context, but this is starting to get, I hate to say this because I know it's pressure, but it's starting to get predictable and the mineralization, the continuity of it is holding up extremely well and I know technically that has some pretty important implications that I would love for you to explain to a non-geo like myself.
Michael Hudson: Okay, to start off with, we should explain that Southern Cross of course was Mawson's spin out in Australia that was listed six months ago. Mawson retains a 60% holding, which is escrowed until May, 2024. And Mawson is an absolutely very happy shareholder of course with what's happening down here in Australia and the mineralization at Sunday Creek is just becoming better. And that's not just an off the cuff comment. If you look at the press releases or even the summary presentations that Southern Cross have put together, those cumulative hundred gram meter intersections, when we multiply width times gold down any one drill hole and get more than a hundred gram meters per tonne, our gram meters are improving. So that's a very good measure. Any one of those holes is an outstanding hole in its own. So we are getting it more and more as we get better at targeting.
So that was your point. It's a very key point that we're understanding the system better. It's also a reflection on perhaps it's getting better at depth, which are these epizonal systems tend to and that's the great opportunity here. Fosterville of course hit its power band at below 800 meters and Costerfield we're seeing the same thing happening where they're getting the uber high grades and free gold below those sort of levels and that is perhaps what is happening here. Another way to re-stress the same point is that the results since we've listed the company down here in Australia in any given week we've hit the top 10 result on the ASX seven times. So that's for global projects that's listed on the ASX. So it's globally significant, it's significant in terms of its frequency of hits. We've tripled the footprint over the last month across two new prospect areas and hit extraordinary grades and widths under Rising Sun, which only had a couple of holes.
We've hit plus 20 meters at half an ounce and then took another step out and then hit something like 49 meters of three grams gold equivalent under Golden Dyke. So the footprint has expanded dramatically to about 700 meters, even up to 800 meters from hole to hole across the trend. We drilled it down now to about 450 meters. There's a lot of anticipation because we've got a hole that we've stated in the last press release that's extending down close to 800 meters and going underneath everything. So we're starting to tap the potential roots of this system. We're finding more shoots, it's getting bigger and the grades are spectacular. So that's an overall summary, but you can hear there's a lot of enthusiasm for this project.
Gerardo Del Real: If all Mawson had in its portfolio was its 60% ownership of SXG Southern Cross, I can make a pretty compelling case that the company is undervalued based on the potential here just with Sunday Creek, let alone the fact that there's other projects in Australia that clearly have either delivered a discovery or have the potential to deliver discoveries of significance. You just published a PEA which had a post tax net present value, again post tax of $211 million US. Can we talk about the value here? I hate to keep repeating myself every time you and I speak, but again, I realize that gold is in a consolidation phase.
I realize that gold speculators are likely waiting out tax loss selling season, but I feel a responsibility to keep banging the table and expressing how undervalued I think Mawson shares are and the potential for a significant re-rating once we get enthusiasm back in the space. And both you and I have seen these markets many times over, Mike, you more so than I. We know how quick sentiment can change and so I want to make sure that this is on everybody's radar. Can you talk a bit about the PEA and just the value proposition?
Michael Hudson: In one word I think that the term is it’s perverse, the delta between what we're seeing. So we see Southern Cross trade six to eight times the liquidity on the ASX than we see in Mawson on the TSX. We see Southern Cross market cap is north of 80 million Australian dollars. We see Mawson's share of Southern Cross is worth pretty much spot on Mawson's market cap. So of course there's going to be a discount holding 60% and it's escrowed so you can't look through the value on a one to one basis, but the value is there. So Mawson's market cap of 44 million is about what its holding is in Southern Cross. And then as you pointed out, we have a project, a million ounces gold equivalent. We designed a project that would be today if it was in production, Europe's sixth largest gold mine and third largest cobalt mine.
The NPV as you said is $211 million. You can't divide 211 million divided by zero, gives you a number that's of course, crazy number that doesn't exist and it doesn't exist in maths and shouldn't exist in comparative valuations. So obviously Mawson has a lot of opportunities at hand. It's a great opportunity for people to look at because of that essentially zero value applied to some part of the portfolio or applied to the parts. But Southern Cross has been a great thing for Mawson and Mawson's share price doesn't reflect the opportunity that is down in Australia or doesn't reflect the opportunity that's up in Finland, but things return to the mean in these markets and it will be recognized at some point and it's just screaming opportunity today.
Gerardo Del Real: Well said. What comes next? I know we're obviously clearly still expecting assays from Sunday Creek in Australia. I believe there's three rigs turning. Is that accurate?
Michael Hudson: Correct. So we've got three rigs turning and spinning 12 hours a day, seven days a week. And there's six holes, well three holes in process, three holes in the lab. We're spitting out results pretty consistently from this project and they've been pretty spectacular for the last five or six months since listing. And of course let's see where we go. But we have given a bit of an indication that as I hinted at before. Hole 50 is the deepest hole on the project and it's drilling for a reason and we've mentioned that it looks like subject assays that we've hit a very thick zone of mineralization, potentially the thickest zone so far. So let's see what we get at depth. But that's a great opportunity in these epizonal systems where you get the super grades at depth. Not withstanding the grades that we're seeing in the top parts of this system are very strong also.
So lots more news flow. Mawson will have a lot more news flow and also in Finland we'll be conducting, continuing to de-risk that million ounces there and continue to permit that project and go through that process as much as conduct a lot of early stage exploration because in Finland the exploration opportunity really just started and the articulation of the PEA demonstrates how valuable extra ounces are now to be found around those, that current resource. I mean it becomes really talky when you can find additional ounces without having to add much if anything to the capital in the project. So that is now very well articulated and we'll be doing some early stage exploration that's commensurate with this market rather than blowing our brains out doing big drill programs up there. We'll be doing early stage exploration on the very large land package that we have surrounding the resources.
Gerardo Del Real: Looking forward to hole 50 from Southern Cross. Looking forward to progress with the rest of the portfolio and really looking forward to the re-rating. Again, this is the opportunity folks. Mike, thank you so much for coming on. Looking forward to having you and Ivan back on soon.
Michael Hudson: Thanks for the opportunity Gerardo, much appreciated.
Gerardo Del Real: All right, chat soon.
Michael Hudson: Bye-Bye.Click here to see more from Mawson Gold Ltd.