General Precious Metals
Silver Hammer Mining (CSE: HAMR)(OTC: HAMRF) CEO Morgan Lekstrom on Building a Pure-Play Silver Company in Tier-1 Jurisdictions in the US & Canada
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president & CEO of Silver Hammer Mining — Mr. Morgan Lekstrom. Morgan, the slightly-taller-than-I-Morgan, how are you doing today?
Morgan Lekstrom: I'm great. How are you?
Gerardo Del Real: I am well, thank you for asking. Listen, I have to tell you, it's been an interesting week, to say the least, in the precious metals space. And despite that, the past several weeks for Silver Hammer, actually, have been very, very good as it relates to the share price.
I don't think it's a coincidence that it coincided with some news here recently where you announced the appointment of former Silver Standard chief geologist and vice president of exploration, Mr. Ron Burk, to the board. And I don't think it's a coincidence that you have several catalysts here, near-term, that I think the market is sniffing out or likely to be positive.
So before we get into all of that, I would love for you to introduce yourself a bit to the audience that may not be familiar with you and just tell us a bit about your background.
Morgan Lekstrom: Yeah, absolutely. And you're right, the catalysts, and with Ron joining the board, it just reflects highly on our management team and our assets. But enough about that… we'll talk about that later.
A bit about me… I've been in the industry for 14-plus years. And I really started into the large mining side when I was 25 with Freeport-McMoRan in Indonesia. I spent some time there. I then moved over to Oyu Tolgoi complex in Mongolia; that massive Rio Tinto mine. I spent a number of years there. And then, I spent a number of years in West Africa building a mine with Golden Star Resources.
And I came back to Canada, and I worked with Sabina Gold & Silver… helped them set up their Arctic program; their engineering program. So my background really is that through exploration to mine building, turn it into production, and build up the teams and company to do that.
So it really compliments everything we are trying to do here with that large exploration payoff and near-term production potential.
Gerardo Del Real: Let's talk about the team. Everything from IR to the technical expertise, the capital markets experience. Everything about the board and the advisory board that you've put together screams potential-company-maker because a lot of the names on here aren't names that lend themselves casually to a small silver company, which is, within the context of the space, for now anyhow, Silver Hammer is that.
It's a pure play on silver with a ton of upside but a pretty impressive team. Can we talk about them a bit?
Morgan Lekstrom: Yeah, absolutely. I mean, you heard about myself. Let's start with a couple on our board and we'll transition to Phil Mulholland, our chief geologist. When we started the company, we had Lawrence Roulston join the board. Lawrence has been in the industry for 40 years. He's the chairman of Metalla Royalties — a $500M to $600M royalty company.
He was the founder of WestBay Capital Advisors. But mainly, he's an exceptional geologist and a mining analyst. And he was the editor and founder of Resource Opportunities — a very predominant news writer and highly respected in the industry as the go-to for geology and a go-to for if projects are viable or not. And having Lawrence in the background has been amazing.
As you said, we just appointed Ron Burk. Ron has been in the industry for 30-plus years as well. He is the former vice president of exploration and chief geologist for Silver Standard. That's now SSR Mining — a US$3.9 billion silver mining company.
He's been responsible for finding projects like the Pitarrilla Project in Durango; the Brucejack project in British Columbia, also. And he was vice president of exploration for Centerra Gold. So before that, he spent a plethora of time with Teck Resources and its predecessors targeting generation and property evaluation in America.
So having Ron and Lawrence with that large, big company experience, massive amount of time in geology… and then we have Joness Lang. Joness is our capital markets guru, right? He's our expert in capital markets. He's the executive vice president now for Maple Gold. He's been involved with raising hundreds of millions of dollars in his career and just brings that exceptional IR, PR, but also that capital markets advising side.
So if you can kind of get the hint to where we're going with our board… it's to compliment myself, the mine builder type, right? Large exploration companies, capital markets, mine building — you kind see where we're going with this.
And then our IR, Kristina Pillon, she's been in the IR industry for about 12 to 14 years as well, and she's been IR for large companies like Metalla. She runs her own company as well called High Tide Consulting and has been absolutely integral and critical to the expansion of our company the way it has been going and kicks my butt every day… so it helps!
Our other two advisors, one, Warwick Smith. Warwick is a very skilled venture capitalist. He is the chief executive officer and director for American Pacific. He was a co-founder of Western Pacific. He's been involved with raising tens, if not more, of millions of dollars in capital and has done an amazing job with American Pacific. I won't go too far into that. If you're interested, you can look for it yourself.
And then, Kurt Hoffman. So Kurt is a native to the Coeur d'Alene area where our flagship Silver Strand Mine is. And he's been involved with the exploration side for 20 to 30 years as well. He sits on the boards of Trident Exploration, Bullion Gold Resources, and United Mine Services.
He was predominantly mineral-focused and acquisition-focused. But having him in the background — because he knows the area so well, because he knows the staking and the regulators so well — it's been absolutely amazing having that type of person in the background to help us liaise with community and all those types of things.
Gerardo Del Real: Let's get into the flagship that you mentioned — the Silver Strand Mine. It's an excellent asset. An interesting asset because of, one, the rock formation, right, which is known to host many, many hundred-million-plus-ounce silver deposits.
The other thing that's interesting to me is that, historically, the mine has only been mined to 90 meters' depth. Walk me through the flagship and how things are coming along on that front.
Morgan Lekstrom: Yeah, you're absolutely correct. So it's the Silver Strand Mine. It's about 45 minutes outside of Coeur d'Alene. It had only ever been mined down to 90 meters. And that was very interesting for us because it is hosted in the Revett formation.
That's the same formation that Lucky Friday, the same geological formation as Sunshine; these monster mines. Lucky Friday has produced over 300 million ounces of silver. At Sunshine, same idea, right? Monster mines.
And when they mined it, they stopped. And they stopped at 90 meters because the company that had it before us was a gold-focused company, albeit this project does have a gold credit of up to about 5 grams per tonne gold, which is pretty impressive for a silver-focused mine to have that type of gold credit.
So we picked the asset up. And myself, being the boots-on-the-ground type, got down there right away when I started. And we decided that we were going to do a combination of surface testing, drilling, and underground. And it has a past-producing and existing underground. We went in there; we rehabilitated it.
We drove a new drift to step out 40 to 50 feet from the old existing ore body and existing drill bay that was there, and we put a new drill bay in. We mobilized a drill here fairly recently, and our drilling program is going exceptionally well. We're really happy with what we're seeing. And the core is getting to the lab, and some of it is in the lab right now — and we're really excited for the catalysts to come out of that.
So having not only that past-producing 90-meter mine but also consolidating a 5.5 km land package around that was really integral to how we want to expand, but the size and the scope of how we want to expand this mine to be potentially a monster mine as well.
Gerardo Del Real: You have a very solid share structure; hence, the upside, right? I believe you have right around 37.5 million shares outstanding. I think, fully-diluted, it's just under 50 million at 48.2 [million]. Market cap, right between C$30 and C$35 million.
That is the one thing that really stood out to me when I started looking at the deal… and it's a deal that Nick Hodge, my partner, brought to my attention. I looked at the structure and I looked at the asset. I remember telling him… if they hit, if they're able to prove this model — this thing's going to be off to the races.
And again, I think the market is starting to suspect that some of those 2,000 g/t samples… that might not be the last of them, right? I think you had an underground sample that was 2,744 g/t silver, which is, yes, just a sample… but it speaks to the potential.
Morgan Lekstrom: Yeah, absolutely. So that sample came from the old stope. Our chief geologist, Phil, was able to go up in there and grab that sample. It also ran about 4.5 g/t gold. So that was one of the indicators to us about how we need to explore this quite differently than they had done before; hence, the new drift and all that.
But to speak about the capital structure, it's a very tightly-held capital structure… about 40% as well insider and closely held and director held; myself, holding a chunk of that as well. But when you talk about the shares, 37.4 million out — we're updating that. Now, it's about [thirty-something]; it's going up. We'll put it that way because people are starting to cash in their warrants and their options. So we're excited to see that coming in.
We're excited that we've added two additional high-potential Tier-1 properties that we picked up from Dave Forest. These types of events — having a very tight share structure… having people bring you potential Tier-1 properties — that speaks to what we’re trying to do as a company. It speaks to our team. It speaks to the potential upside in the capital structure. So we're excited!
Gerardo Del Real: The other two assets you mentioned — the Eliza Silver Project in Nevada and the Silverton Silver-Gold Project in East Nevada's Silver Alley — can you tell us a bit about those briefly?
Morgan Lekstrom: Yeah, absolutely. So we picked those two up from a gentleman named Dave Forest; very predominant mining geologist as well as a newsletter writer for Casey Research and the founder of Sunward [Resources].
The Eliza Project; past-producing silver mine up to grades of 18,500 g/t equivalent. 1860 to 1870, it was the largest silver rush in Nevada, in the US, at the time. It's the reason Nevada is now the Silver State.
And it had not been looked at. So the north side of Treasure Hill. And we're on the south side where some small little adits and small little shafts where they started producing extremely high-grade. And then, it dips under some shale cover. And people walked away from it because the modern technology that we have now was not there. The geological understanding was not there.
So now, we have this new look… this new ability to look at it. And very shortly, you'll see some catalysts from us come out around Eliza. As well, transition down to Silverton. Silverton is an hour and a bit out of Tonopah in a very predominant district right now for exploration.
It's a past-producing silver mine; up to 932 g/t silver. But also on that property, there's a portion of the property that is what we like to refer to as it looks like it could be a Round Mountain-style gold system. So we have some catalysts coming out from there, and we just finished geochem. We just finished a bunch of sampling.
And I've got to preface this… we only picked these assets up two months ago, right? So we closed on the assets two months ago. We fast-tracked sampling. We fast-tracked geochem, mapping — everything. We're actioning everything we say we're going to do and more.
Gerardo Del Real: You mentioned people starting to exercise some options and warrants. What's the treasury look like right now?
Morgan Lekstrom: Well, at the last financials, we had about C$2.8 [million] in the bank. And during drilling, we're burning about C$400 [thousand] a month. And then, that'll taper off. So we're in a pretty good position to execute on all of our projects going forward without the need for additional raises.
Gerardo Del Real: Morgan, a lot to like! You've got the team. You've got the structure. You have the assets. You have assays pending. You have geochem and exploration results from your other two properties here in the next month or two, I believe. A lot to like. Anything to add to that?
Morgan Lekstrom: No, I've just got to say… silver is ready to go, I think, and ready to run. But having the ability to not only be a part of potential Tier-1 assets but be a part of a team like this and to be, obviously, a shareholder in it — I think there's a lot of potential upside for that large exploration payoff for potential investors and shareholders.
And those things, everyone always thinks… oh, crypto, you can only do 20X in crypto… and stuff like that. That's not correct. I mean, there are many examples of many mining companies out there that have massive potential upsides. So we're hoping to be one of them. And that's all I can say.
Gerardo Del Real: Well said. I'm hoping to have you back on soon with some assay results, validating some of that. Thank you for your time, Morgan. I appreciate it. You have a good one out there.
Morgan Lekstrom: You as well. Thank you very much.
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