Midas Gold (TSX: MAX) CEO Stephen Quinn on the Stibnite Gold Project in Idaho: Updated Permitting Schedule, Congressional Support & Community Engagement with the Stibnite Advisory Council
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the President and CEO of Midas Gold (TSX: MAX)(OTC: MDRPF), Mr. Stephen Quinn. Stephen, how are you this morning?
Stephen Quinn: I'm doing good, Gerardo. Thanks for getting in touch.
Gerardo Del Real: Absolutely. Thank you for taking the time to sit down with us and chat a bit. You had some news recently providing an update on the state and federal agencies' permitting schedule for Midas Gold. A couple of takeaways that I'll share here in a bit, but I would love for you first to kind of provide a bit of context as to the news and the slight delay that we kind of anticipated as a result of the government shutdown. Then I want to get to some of the more positive aspects that came out of this latest delay.
Stephen Quinn: Sure. We put out a press release on Tuesday that the permitting schedule for the Stibnite Project has been extended from Q3 into Q4 2020 for a final decision. So, it is a delay. There were two primary factors driving that. One was the partial government shutdown. The Forest Service, which is our lead agency, was one of the agencies caught up in that. So while the shutdown lasted about five weeks, the reality is when people came back, the net impact was a bit longer than that.
That's one of the major factors in the timing extension, so not unsurprising. We cautioned – when we put out a press release back at the end of January on the permitting schedule at that time – we cautioned that we anticipated some impacts related to the partial shutdown. But we couldn't make a call at that time because, if you recall, at the end of January, when the government came back, it was only for two weeks, and potentially another shutdown was going to happen after two weeks, so we couldn't provide any guidance at that time. But obviously now that second shutdown didn't happen, so we have greater clarity, and so the agencies have updated the schedule based on that. So, that was a significant driver in that delay.
In addition, there has been some additional time related to looking at alternatives for the development of the project, which is something the regulators are required to do by law, that they have to consider alternatives. It isn't just a simple exercise of looking at alternatives. You have to read all the water modeling and geochemical modeling and various things like that, and so it has knock-on impacts when you start looking at some of those alternatives. Those are the two main considerations in why the permitting has been extended out a bit. But as you say, it wasn't unexpected.
Gerardo Del Real: So, the way that I understand it is this now puts the final ROD for the project in late Q4 of 2020. Is that accurate?
Stephen Quinn: Yeah, that is correct. Just under two years from now.
Gerardo Del Real: Excellent, perfect. I mentioned off the top here that one of the positive things I wanted to get to, one of the main takeaways for me anyway in this news release, one of the positive things that came out of this is that 1st Congressional District Congressman Russ Fulcher, where the Stibnite Project lies, obviously, said, and I want to quote him, he said, "One of my goals in Congress is to bring new jobs and opportunities to rural Idahoans. The Stibnite Gold Project proposes new high-paying jobs while also cleaning up a brownfield site and other legacy impacts from Second World War. We need regulators to do their jobs, but we also need permits to move forward. I am disappointed by the recent announcement of additional delay. We need the project to stay on a reliable timeline and for the Stibnite Gold Project to become a reality."
That is a heck of a statement and one that isn't very gray. It's pretty clear. Can you comment on the support? That's got to be a positive from your end, knowing that you have that kind of support with the Congressman here.
Stephen Quinn: Yes, and we really appreciate it. It was interesting that when the delay sort of got triggered by the US Forest Service, that Congressman Fulcher's office reached out to us and said, "We're very disappointed by this." They offered to provide us some information, because they knew we put out a press release every time there's any changes in schedule or anything like that, so it was them proactively kind of reaching to us.
That was encouraging. His statement really kind of summarizes the pros and cons and challenges, that this is a major project in an area that could really use these kinds of jobs in central Idaho, which is within his district, and recognizes the importance of not just the employment and economic benefits but the legacy impacts from the Second World War and the fact that we're going to clean all of those up. I think he really kind of gets down to the point, which is yes, the regulators need to evaluate everything that we're doing and making sure it's being done right, but it also needs to move forward in a timely manner and provide some certainty, because as shareholders know and investors know, we've seen a number of delays over the last year or so, and that we need to get to the end and get on and get the cleanup done and create that economic benefit.
But having the local support of Congressman Fulcher is obviously a strong endorsement. We've seen that in the past from the Congressional Delegation for all of Idaho about a year ago, where they all collectively wrote a letter – four of them, two senators, two congressmen. We had the resolution from the State Legislature in February last year, where 104 out of 105 of the State Legislatures in both the State House and State Senate voted to send a resolution to the president of the US and the federal agencies that they're behind the project and get on with it. So, it sort of illustrates that people understand the story but are frustrated by the time delays related to getting it through the regulatory process.
Gerardo Del Real: Well, the one upside – and I'm usually the optimist, right? – the one upside that I see is that you may be getting your permits, fingers crossed. And let's assume that that's what happens, right? You may be getting your permits right at the beginning of a raging gold bull market if things continue to play out the way I think they're going to play out, Stephen. So that's a plus for patient, long-term shareholders, or frankly, new shareholders that get to buy at these depressed prices.
I can't help but notice that you have also established the Stibnite Foundation, and you've made a first contribution of $100,000. Can we talk at that? Midas Gold and the interaction there with the community, which I've seen firsthand. I know the thorough work that has gone into that. I know you work with the Stibnite Advisory Council to make sure that you are discussing the various aspects of the project and the community needs. Let's talk about Midas Gold and the Stibnite Foundation.
Stephen Quinn: Sure. We took a different approach to community engagement than is perhaps common in the US, but perhaps more common in Canada, and really started reaching out proactively to the communities way back in 2012, 2011 when we first started the project, and said, "Be clear, this is a long-term project. It's not going to happen tomorrow, but this is the kind of things that could happen and what our approach is to employment, business development and the environment." And obviously, a lot of the locals are very focused on all of those different aspects of the project.
So we've been, I would characterize it as informally engaged with those communities with multiple presentations to different town councils, county commissioners, different social groups, different things like that over the years. But as the process has sort of moved forward, we said what we really need to do is sort of formalize that process and have it in a more structured environment, so rather than dealing with multiple communities individually, can the communities work together and provide a sort of a common feedback to us. We built this off something that those communities had worked on the year before, which was a competition called America's Best Communities. They collectively entered into that competition and sort of pulled all the communities together. We worked with a group of those people who'd sort of been involved in that and said, "Obviously that's a good example of communities working together. Is there an avenue to see a similar relationship in respect to our project?" That sort of led to this community agreement that we signed with eight communities late last year and the beginning of this year.
The two formalized aspects that came out that is the Stibnite Advisory Council, which meets monthly to look at things that are of concern and interest to the community, whether it's traffic, or employment, or housing, environmental activities, different things like that and provide them a better, detailed understanding. Then they can take that back to their community leadership and discuss what's happened there and get feedback on that front.
The second side of it is we had been doing a lot of community support activities over the years. But again, it'd been informal, and we were deciding, as Midas Gold, where those monies would go. Whereas this America's Best Community process they went through, they agreed collectively that they would collectively work where the most important things were to all the communities together.
Again, we sort of built off that and said let's set up the Stibnite Foundation, and each of the communities appoints a representative to that foundation, and the foundation decides where the greatest needs are and the most appropriate needs on the communities as a whole. So, this is an initial contribution. We'll be making additional contributions that are milestone-related. They're related to as the project progresses, and we'll also be providing some shares as an endowment, which will provide some long-term value but obviously should increase as we're permitted, as we go into operation and so on so that long-term endowment is there.
The key point is that the distribution of the funds related to that are under the control of the communities as opposed to Midas Gold making the decisions. But it's really part of that engagement and working in a transparent manner with the communities to provide a forum where they can directly address concerns and issues and points of interest directly with Midas Gold, and we deal with them collectively rather than individually.
Gerardo Del Real: Well said, well said. Well, good work as always, Stephen. I appreciate you taking the time to give us that thorough update and talk a little bit about the support and everything that's going on with the community and everything that you're doing while you get the permits to the finish line. So, hopefully we chat again soon. Is there anything else that you'd like to add?
Stephen Quinn: I think that those are obviously the recent developments. I mean, I think the key point that people always have to keep in mind, as you kind of implied earlier, this has been a long-term story. This is a very large, high-quality, low-cost mining operation in a good geopolitical jurisdiction, i.e., the United States. Those are rare opportunities and the value comes as you move these things forward. This is not a trading type opportunity. This is an investment opportunity, where there's a very substantial and material asset behind the company, and we're moving it forward step by step, making sure we're doing things right.
Gerardo Del Real: Excellent. Well said. Stephen, thanks again.
Stephen Quinn: Thanks, Gerardo.