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Sirios Resources (TSX-V: SOI)(OTCQB: SIREF) CEO Jean-Félix Lepage on Strong Initial Drill Results, Resource Expansion Potential, and the Path to a Major Re-Rate at Flagship Cheechoo Gold Project in Québec’s James Bay Region
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO of Sirios Resources (TSX-V: SOI)(OTCQB: SIREF) — Mr. Jean-Félix Lepage. JF, how are you today?
Jean-Félix Lepage: I'm doing quite well, Gerardo. I'm happy to have another chat with you.
Gerardo Del Real: Well, listen, let's get right into it. I'm a biased shareholder. I own a bunch of shares. I am a very happy shareholder. You announced assays from the first five holes totaling 1,753 meters of the Phase 1 drilling at the Cheechoo Gold Project.
Let me rattle off some of the highlight numbers. 48.5 meters of 2.40 grams per tonne gold. That included 1.1 meters of 77.65 g/t gold. You also had another hit of 37.6 meters of 1.49 g/t gold. You had a 32.2-meter hit of 1.16 g/t gold, which included 12.88 g/t gold over one and a half meters.
So look, clearly, you're hitting wide widths of mineralization. Clearly, there's some high grade in there. And from reading the release, you also have visible gold and quite a few more holes there with assays pending. So what are your initial impressions of the initial results? I have to believe you and the team are happy.
Jean-Félix Lepage: Yes, we are. And it's exactly what we're looking for. So I need to remind everyone, the objective of that drilling campaign is really an extension of the actual resource. So what we want to see is intercepts inside of that resource pit, but outside of the resource zone, and also just outside of it.
And that really great intercept you mentioned, the 2.4 over 48.5, that's right below the pit. So that's the intercept that we're looking to expand the resource later this year. So no, really great start, and it's also from quite a small number of meters. It's less than 2,000 meters of drilling that we announced yesterday.
So now, there's a lot more coming, and as you said, we already know that there's VG in at least seven other drill holes. So yes, great start for us.
Gerardo Del Real: Oh look, you've completed 33 holes, tons more assays coming. Four more are in progress. So the total drill length is coming in at what, just over 13,000 meters for this program?
Jean-Félix Lepage: Yes. So it was at 13,000. By now, we're over 14,000, so productivity is good for now. We still have four drills on site. There's another month of drilling in front of us, so the objective is still getting towards that 25,000 meters. So there's more coming. The drills are spread out across different targets, and we're progressing quite well in every one of them.
Gerardo Del Real: You're looking to complete Phase 1 in September, if I'm not mistaken, and then what comes next? The updated resource estimate?
Jean-Félix Lepage: Exactly. So that Phase 1 was really to feed that new resource estimate. So as I said, everything we are drilling right now is really to extend that resource. We do have another 10,000 meters at least in the bank for a Phase 2 that we're working on the targeting right now, and we'll continue with the results coming in.
But yes, that Phase 1 is really to feed that new resource, and we're still on track to complete that resource update before the end of the year.
Gerardo Del Real: I'm not going to ask you where you hope that resource lands, the number on it. I have speculated to subscribers because I cover Sirios in the letter, in one of my paid letters, and obviously, I'm biased because I'm a shareholder.
But I know in conversations that I've had with several peers, they've mentioned that they could see a pretty clear path to getting close to at least five million gold ounces.
Given the metals environment that we have right now and given the policy change here in the U.S. and then the run that I think not just that gold is on, flirting with 4,700/oz again, but I think the one it's going to continue to be on for quite some time.
If you get anywhere close to five million gold ounces, where do you think the Sirios valuation deserves to be? Because I think it's one of the most undervalued gold companies in North America at the exploration stage. And again, you're the CEO, you're going to be biased, but what do you think of the current valuation?
Jean-Félix Lepage: So the market cap today is around C$120 million, so I think we are still sitting on a huge re-rate. If we look at peers, we're just on the resource phase, and I'm talking about the actual resource. Potential re-rate is at least two to 3x already, and then you have on top of that the resource increase, and on top of that, the PEA.
And I think it's just that sequence of news from the drilling results and then the resource and then the PEA. So re-rating is always a process. So for me, it's that whole sequence towards those PEA results that is really what I'm focusing on, and we're fully financed to deliver that.
So I think for now, it's just putting that news out and making sure that people understand what we have in mind and how that deposit can grow. But yes, without telling a number, it's multiple-x what we think we can achieve.
Gerardo Del Real: Well, listen, if you didn't add any ounces to the current number, and obviously you're going to because you can take a look at Figure 1 on the news release and see where the extensions are pretty predictable and consistent there, but even if you stay just where you're at, you would still be significantly undervalued.
So if anyone is looking for a de-risked exploration story that already has three million gold ounces of good grade in a great jurisdiction that's not getting much credit for those three million gold ounces but has a ton of exploration upside, I would encourage you all to go and check out Sirios Resources.
I think there's a heck of a lot of legroom. I think a three to three and a half times re-rate just based on the current resource is being conservative. And again, if you're anywhere close to that five million ounce mark with higher gold prices, I think it's going to be a fun next six to 12 months.
Anything to add to that, JF?
Jean-Félix Lepage: I think you summarized it quite well, and that's the kind of story I like. I'm a mining engineer, I'm not a geologist, so I like low-risk exploration. So that's exactly what we have in front of us. So no, I think we'll continue to deliver, and yes, anyone can just follow our next drilling results. And as we deliver on that plan, I think we should see that re-rate coming in.
Gerardo Del Real: Heck of a start. I know you've got a lot of institutional support from that last financing. I expect those institutions, as everybody gets back to the office, to be on the bid pretty aggressively here over the next several weeks and months. JF, great start. Congratulations. Happy shareholder over on this side. Appreciate your time.
Jean-Félix Lepage: Thanks again. Talk to you soon.
Gerardo Del Real: All right. Cheers.
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