Categories: Precious Metals
Topics: General Precious Metals / Gold Stocks

Southern Cross Gold (TSX-V: SXGC)(OTC: MWSNF) CEO Michael Hudson on Drilling High Grade Gold in a Gold Bull Market

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president and CEO of Southern Cross Gold Consolidated (TSX-V: SXGC)(OTC: MWSNF), Mr. Michael Hudson. Mike, first and foremost, how are you today, sir?

Michael Hudson: I'm very well, Gerardo. I'm top of the world down under.

Gerardo Del Real: Well, listen, it's hard not to be. You have one of the most exciting, highest grade gold discoveries in recent memory at a time where gold is at record high gold prices and primed to go higher. You have a phenomenal shareholder registry. Your technical team has been top-notch. Look, you're consistently delivering results like the results you delivered this morning, 28.6 meters of 10.3 grams per tonne gold at Sunday Creek. The 100% owned Sunday Creek, by the way. Can you give me some context to where the company is, the project is, and what comes next?

Michael Hudson: The project's of course down in Southeastern Australia, literally in the shadow of the head frame of what was the highest gold mine on earth for four of the last eight years, Fosterville. So we've come on the back of an amazing discovery at Fosterville that produced $10 billion in market cap appreciation. We found another one of these systems.

We've been very fortunate to actually develop this system. It really took off around early last year. Now we've got eight rigs on the ground. And we found this system in a time when nobody really liked gold as much as they do today. So we're able to do all the hard yards, understand the geology. We've now put in something like 75 kilometers to 80 kilometers of drilling. And, we've got a hit rate that's better than anything else I can see globally. We've defined an exploration target of 2.2 to 3.2 million ounces between 8.6 and 10.6 grams per tonne gold equivalent. We've got a mix that is 80% gold recoverable value and 20% of that is antimony. It makes it a very special project in that way. And, it's only early days. We only explored about 5% of it.

So it's one of those few very rare assets that's multi-million ounce, 10 gram dirt that is only getting bigger. And again, if we're thinking about rarity, there's just not these projects out there. We've seen Windfall in Canada go. We've seen Bellevue go into production. We've seen Spartan just recently here in Australia get taken out. So this is just one of those very few rare assets that is developing quickly in an amazing gold bull market in a Tier I jurisdiction, 100% owned by a single company.

Gerardo Del Real: I want to talk a bit, and we talked a bit off-air, how important an advisor and mentor and close friend of mine that taught me the business initially and continues to always emphasized to me, "Gerardo, I don't care how much you know the management team, how well you know them, how great the asset looks; share structure, share structure, share structure." There was a time where formerly Mawson Gold had a bit of a challenge in making sure that that share structure was as tight and insulated as you wanted it to be. That is no longer the case. And you have a registry that is as strong as any company with this type of discovery in the market right now. Can you speak to that just a little bit?

Michael Hudson: Absolutely, and I should have almost addressed that up front. I agree totally. You can have the best people with the best discovery, but without the best shareholder base, you're always going to struggle. We've known each other for a long time now, Gerardo, and it hasn't always been simple and it hasn't always been as good as this. So this is the perfect discovery mixing with the perfect shareholder base. 30% of the stock or more is owned by three of the smartest people in the business. Pierre Lassonde, who everybody will know, of course, the founder of Franco-Nevada. He started many unicorn companies, multiple. He's probably the best value investor in the gold space in a generation or more. Darren Morcombe is one of the greatest thinkers, and he's been behind many successful stories. He was refining over 20% of the world's gold 20 years ago in the company he owned. And then Kiril Sokoloff, who's one of the greatest thinkers across multiple industries, and this is his big gold bet in a big gold bull market. And then we got 25% institutional support from around the world also.

But those three key investors are some of the best thinkers in the space. They've backed this project and they protect it. Nobody's ever going to be able to take this project unless those good thinkers are willing to sell, and they know what an asset like this is worth. So we're going to be able to develop this and work through the strategy to create one of the highest margin gold businesses globally with that alignment of shareholder values.

Gerardo Del Real: You have a tiger by the tail. You have eight rigs going. You have a record historic gold bull market. What comes next?

Michael Hudson: Well, we got to deliver on the very, very, very good start we've got here. We've got a very, very strict view, and that's what our shareholders bring on looking on every decision we make strategically through the company on a per share value metric. So every strategic decision in how we spend money at this high cost of capital still in terms of where the company market cap is to where we think it can go needs to be taken sensibly. So we'll start bringing more. We have brought more rigs in just recently to start the infill drilling while will we still continue to explore. We've got the Lassonde curve that everybody knows of and Pierre developed. We've got to make sure that we stay on that discovery end, as well as do the de-risking from the more engineering side of the project. We're putting a decline into the project. We're permitting a decline as we speak. We'll have that application ready by mid-year, so that will go to the de-risking also.

So making it bigger and de-risking is simply, I think, the story that what is next. And this is only going in one way. We haven't even talked about these results. We don't need to, because they're more of the same amazing results and extensions of the system as we continue to do what we just said, de-risking and making it bigger.

Gerardo Del Real: Congratulations, Mike. You have yourself a billion dollar company. I suspect it won't be the last one. You've done an absolutely brilliant job of developing this project. And again, I want to remind everyone that is following the story, there are other very, very high quality projects in the Southern Cross Gold portfolio. This one just happens to be one of those special ones that deserves the bulk of the attention for the time being. Anything to add to that, Mike?

Michael Hudson: No, you've got the key story, Gerardo. Thanks again for your interest. Onwards and upwards for Southern Cross Gold there’s little doubt.

Gerardo Del Real: Well done. Chat again soon.

Michael Hudson: Thank you.