Categories: Precious Metals
Topics: Gold Stocks

Southern Cross Gold (TSX-V: SXGC)(OTC: MWSNF) CEO Michael Hudson on Drilling 3.4 M @ 466 g/t Gold at Sunday Creek

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president and CEO of one of the most exciting gold discoveries in recent memory. I'm talking of course with Mr. Michael Hudson from Southern Cross Gold (TSX-V: SXGC)(OTC: MWSNF).

How are you today, Mike? I got to believe you're doing pretty well. You're quarterbacking a billion and a half dollar company. That's the current valuation, I suspect that goes much higher, and you're putting releases out drilling meters of 466 grams per tonne gold at Sunday Creek. Are you as good as it looks or better?

Michael Hudson: You want to maintain humbleness in this business at every point if you can, so I'm going to answer that in a humble way. It's one challenge begets another, but this is an amazing discovery. As I said to somebody recently, we got the last press release was the best drill hole in the industry for May, and we've seemed to have done that time in time out on this project.

There's a hell of a lot of gold mixed with a wonderful shareholder base and mixed with a wonderful market. We haven't had that market until relatively recently in gold as we've been making this discovery. It's the right time, of course, but the project is phenomenal.

Gerardo Del Real: No, look, the rock in the release is some of the prettiest rock I've ever seen, I mean 3.4 meters of 466 grams per tonne gold equivalent is amazing. 2.4 meters within that of 670.4 grams per tonne gold equivalent. There's even a .2 meter of 4,700 grams per tonne gold. Just absolutely, absolutely spectacular grades.

Now, with that being said, you and the team from day one have been methodical and very diligent in scaling out the project in a very, very organized manner. When I hear the amount of rigs that you have going now, that tells me you likely have a really, really good idea of what you have and the potential value here. How many rigs do you have turning, and what comes next here in a gold market that… Look, $3,400 gold is exciting, but it almost seems like $3,000 is a new floor and $4,000 is likelier than $3,000 here soon. How do you manage that kind of enthusiasm knowing that you're cashed up, knowing that you had people willing to write much bigger checks than the checks that were written, and knowing you have a tiger by the tail?

Michael Hudson: Well, the tiger by the tail is there's very few multi-million ounce 10 gram deposits globally, and those that did exist have been taken out over the last year or two. This is one of those rare assets, number one.

We've got eight rigs, to answer your question, today. We've got more rigs coming, another two coming in the short term, and we just raised 162 million Australian dollars to execute on a very well-enunciated plan. That is to drill 200 kilometers of infill to produce the first resource, which will be substantial. And then we also have another $20 million for regional exploration knowing that that planned infill is only one-tenth of the regional trend. We have 90% of the trend to explore. That drill out of that resource will also be essentially doubled by the exploration target around it with that drilling as well, so we're expanding it on all levels and de-risking it at all levels.

We're also putting in a exploration tunnel or decline. We are permitting that as we speak, and the plan there is to go more than a kilometer underground about 160 to 70 meters vertically. That will do three things. It will increase the drill out speed by three times, so every month underground is worth three months on the surface for drilling. We love speeding this up. We want to speed this up, and that's what the decline can do.

It also is progressively permitting rather than going to the government in two or three years and saying, "Here's 500 pages of documentation, can you please permit the project?" We will take a lot of the risks off the table with this decline around water and vegetation and other aspects that we have to deal with at this stage, so that's very positive.

And then of course we get to see the mineralization that we're making assumptions with because even though this is a mine for 50 years, we've got drill-hole-to-drill-hole geostatistics, et cetera that demonstrate this is holding together, but there's nothing like touching the ore.

Gerardo Del Real: Couldn't agree with you more.

I have to touch on the antimony before I let you go because, look, that represents a pretty significant percentage of the in situ recoverable value at Sunday Creek on a gold equivalent ratio. Can you speak to that?

Look, it should also be noted for those that aware that the Chinese government announced it was placing quotas or export limits last year. I don't think that eases up anytime soon. It doesn't seem like the world is becoming a friendlier place and people are playing nicer in the sandbox than they used to. Can you touch on the value there strategically, and economically potentially?

Michael Hudson: Sure, the antimony or antimony is you tend to say over your part of the world is about 20% of the in situ recoverable value. It's a gold project. 80% of the value is in the gold, 20% in the antimony. We always say the gold will pay for it, antimony will help permit it because it does make it a very strategic project.

It is one of the largest western world deposits ex China and Russia, and China and Russia control plus 80%. You don't have a defense industry amongst other industries without antimony. It is just one of those supply chain critical metals or the critical metals that we've lost the supply chain in the West, and we are desperately trying to rebuild it. This project amongst a few others will be the key to resupplying that supply chain and providing the offtake to give the West a confidence to rebuild that midstream processing facility that is absolutely needed here in the West.

It's a very key part. The project, like I said, was mined for 50 years. In World War I, it was kept open by the UK Imperial Munitions Act for the antimony, and they couldn't have cared less about the gold in those days. The same chemistry that kept it open in World War I is essentially the same chemistry that makes it critical today.

Gerardo Del Real: They say history doesn't repeat itself, but it sure does rhyme. We're seeing that play out. Mike, congratulations again on all the success. I suspect there is still a lot of runway left, and looking forward to seeing what else Sunday Creek delivers here the rest of this year and next.

Michael Hudson: Thanks for having me on, Gerardo. It's always great to update you.

Gerardo Del Real: Appreciate the time. We'll chat soon.

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