Mawson Resources (TSX: MAW) CEO Michael Hudson on the Discovery of Significant Cobalt Mineralization at Rajapalot Project

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is Chairman and CEO of Mawson Resources (TSX: MAW)(OTC: MWSNF), Mr. Michael Hudson. Mike, how are you this afternoon?

Michael Hudson: Top of the world. Thanks, Gerardo.

Gerardo Del Real: Excellent. Listen, you had some news this morning. I appreciate you jumping on with me on such short notice. It's important news for Mawson. We talked in the past about the intensity of the system that you have in Finland. You have high-grade gold, you have lower grade gold, you have it at depth, you have it near surface.

But now you've discovered significant cobalt mineralization. There's a lot of points that I want to touch on, specifics in this release. But can you please provide an overview about today's release? And then let's get into potential recoveries and then the mineralization and then the rocks that it's in and then some of the political implications. First things first, congrats, you have a bunch of cobalt it looks like.

Michael Hudson: Thank you, Gerardo. And I suppose just a bit of history is perhaps in order if I can give you how that story's developed.

Gerardo Del Real: Absolutely, please.

Michael Hudson: We knew there was a cobalt credit essentially in the thin, hand portable drilling we did up until about 2013 at a project called Palokas, which is in this broader Rajapalot area. And then we started assaying for gold only for quite a time. That was essentially cost driven and gold being our main commodity was the focus. So we went gold only. And then about eight months ago we went through a large lithogeochemical re-assaying program to basically look for near misses geochemically and what they may mean and that meant we re-assayed many of our holes over the broader area.

And they started to come back high in cobalt over the much larger area, over a 3 by 4 kilometer area and we thought, well this is great. But of course we're a very serious technical company and looking for gold and we weren't ready to flip into the next hot commodity without doing a bit more background work. So we undertook a mineralogical survey with the Geological Survey of Finland and the Camborne School of Mines to look at where the cobalt sits, what kind of minerals it's in. And the greatest surprise was that it's in a couple of minerals namely cobaltite and cobalt pentlandite, which are standard minerals that are mined elsewhere for cobalt so we're not looking at refractory cobalt, we're looking at minerals that can be processed in the sulfides and separated as part of a concentrate.

With those two aspects we thought we're onto something here. And when we started pulling it together, to add a significant by-product potential to the project. It adds continuity and width to the gold mineralized zones which stack up in their own right without a doubt. But this is certainly the whipped cream on top of the cherry pie.

Gerardo Del Real: Now when you say that the by-product adds value. We're talking not an inconsequential amount. We're talking in the order of 20 to 30%, is that correct Mike?

Michael Hudson: With the caveat that we've got 3,000 assays to re-assay. We've only assayed half the drill holes to date on the project. Just bear in mind there's a lot more assays to come but from what we've got so far with just under half the assays for multi-elements including cobalt. There's an increase from gold to gold equivalent where we include cobalt with the gold. And there's a 20 to 30% average increase.

Gerardo Del Real: Let's talk about the fact the world's largest cobalt refinery happens to be in Finland. Tell me about that, Mike.

Michael Hudson: This is a very interesting story. There's the world's largest cobalt refinery that sits 400 kilometers south of us in Finland. It processes or refines half of the world's non-Chinese cobalt for batteries. So it's a significant strategic asset. So 80% of refined cobalt comes out of China. Of the remaining 20%, 10% comes from Finland and that's the refined cobalt. Now if we talk about what's actually mined, the majority as we know of cobalt comes from the DRC. Somewhere between 55 and 65% of mined cobalt comes from the DRC, including the feedstock for this refinery in Finland. They've got long-term supply contracts with Chinese-owned mine from the DRC.

Now politically it's very interesting because the Nordic countries, Finland and Sweden, are very, very strong on their mandate to find ethical supplies of metals that go into their electric cars and their phones. So a domestic supply 400 kilometers away from Finland as a potential feedstock into that refinery is of course a natural fit. So that's just a very interesting side story to this discovery.

Gerardo Del Real: Interesting. That's really fascinating, Mike. I want to take a second and just commend you and your team because you could have put out this news release months or frankly years ago, just attach the name cobalt like many of the juniors do and received an unfair amount of attention for it. You actually waited. You took the time to identify the rocks that the cobalt is in and you made sure it was significant enough to merit a press release. So let me congratulate you for not putting out a flimsy news release just to attract the attention of the speculators.

Second, I want to talk about the assays because I think context is important. One of the assays was 10.8 meters of 1,299 ppm cobalt and 6.2 grams per tonne gold, which takes that gold grade to an 8.7 gram per tonne gold equivalent from 8.7 meters. You had another mineralized interval of 30.8 meters at 525 ppm cobalt, 7.1 grams per tonne gold or 8.2 grams per tonne gold equivalent from 2.5 meters. A third intercept was 19.5 meters at 696 ppm cobalt, 7.1 grams per tonne gold, 8.5 grams per tonne gold equivalent from 1.3 meters. So a lot of this mineralization is shallow. That's important.

Michael Hudson: It is. It mimics the gold. So we've had lots of high-grade gold from surface and these are re-assays of holes that we've already put gold numbers out for. From what you just read out there we can see a greater width to the mineralization, including the cobalt. So the gold mimics the gold zone and extends it across holes or across the width of the hole. And it also adds that continuity also between say higher grade and lower grade holes the cobalt seems be more consistent. And just for a rule of thumb for your listeners, around 500 ppm cobalt at current prices – and remembering that cobalt has gone through the roof over the last few years, it's up 300% – but 500 ppm cobalt is equivalent to a gram of gold in terms of in situ value. So we can see that we're adding 1 to 2 grams of value in gold equivalence to the rock on average with these cobalt credits.

Gerardo Del Real: And again, you didn't cherry pick a small area. This mineralization occurs across an area of 3 kilometers by 4 kilometers? Is that accurate?

Michael Hudson: It does. We've got holes from each part of the prospect area at Rajapalot. And certainly the cobalt is significant in all of those. Albeit that we've got a lot of re-assaying. None of the drill holes that we've put out this year – and some of the fantastic gold results – have had cobalt assays yet and they're literally going to the lab now. We're going through a big re-assay program with two labs. So over the next three months we'll start to see these further cobalt numbers come through. It's an exciting extension to the project. Gold is without a doubt the main commodity and will remain the main commodity on the project but it's not often that you can see such a significant by-product added to what is already an exciting project.

Gerardo Del Real: What's the true thickness of the mineralized intervals thus far? Again, with the disclaimer that there's still a lot of assays pending but thus far what's the correlation there?

Michael Hudson: The true thickness is almost the same as the drilled thickness. We've drilled perpendicular to the mineralized horizon so we're looking at 90 to 95% true thickness.

Gerardo Del Real: Excellent. And getting back to the main focus, the gold, when can we expect some more assays, Mike?

Michael Hudson: They're banking up. So we're under pressure to put more out. I understand and they'll come very shortly without a doubt.

Gerardo Del Real: Mike, thank you for your time. I look forward to having you back on to talk about those assays as they're published.

Michael Hudson: Likewise, Gerardo.