Mawson Resources (TSX: MAW) CEO Michael Hudson on High-Grade Gold Step Out Hit at Palokas: “Developing Into What Looks Like a Substantial System”

June 10, 2019

Sign up for the free RSD newsletter to get the latest
news and interviews delivered to your inbox.

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the Chairman and CEO of Mawson Resources (TSX: MAW)(OTC: MWSNF), Mr. Michael Hudson. Mike, how are you this morning in your part of the world?

Michael Hudson: I am, on a Saturday morning, top of world as normal. Thank you, Gerardo.

Gerardo Del Real: Thank you for your time. The interview is timely for two reasons. The first being gold's recent move. It closed today at $1,340, next week should be interesting. It's of interest to me that there has been very little profit-taking from the $1,270-level. Let's see if that holds. The second thing I'd like to mention and I've observed is the fact that the juniors haven't really responded. It's almost as if nobody believes that this $1,340 price level is going to hold, which I think presents a phenomenal opportunity for companies that are out there exploring and succeeding in their exploration efforts.

I can think of very few companies, or news releases I've seen within the past couple of weeks, that have the kind of numbers that your last release did. You drilled 15.2 meters of 8.5 grams per tonne gold equivalent. As important is that it was a 275-meter step out. This was over at Palokas.

You're hitting on multiple targets. Let's talk about it, Mike. Give me the details. You also had really high-grade cobalt on this thing.

Michael Hudson: The drill, the truth machine is working. Thank goodness, Gerardo. We've had a very, very strong end to the season. Even though the market doesn't seem to recognize it and understand it, these are very meaningful results. We're creating value in ounces in the ground quickly here.

As you said, we stepped out 275 meters down-plunge from the last high-grade results at Palokas. That is really predicated on the understanding of how we understand the system now and what methods we're using to target. We basically now have three areas that we've tested down to more than 400 meters from surface – at Palokas, South Palokas and Raja – with another two areas developing, with mineralized intersections also hit within more than a kilometer of any of those resources. And then we're only really limited by where we've tested the system with electromagnetics, which is one of the ways that we're targeting. The geophysical method and then drilling.

This system is now developing into what looks like a substantial system. We've said that before and we believe that but now it's actually being drilled out. Our aim was to double the close-to-half-million-ounce-resource that we put out in December that only had currency for a few weeks until we started drilling. We haven't got a resource out there now, but when you start stepping out and tripling depths of these systems, you can see where it's going.

Gerardo Del Real: You can put a ruler to it, plug in some numbers and do a quick back of napkin resource calculation. Can we talk a bit about the really elevated levels of cobalt? Pretty impressive.

Michael Hudson: Yeah, this is interesting for us. The highlight was 1 meter that went 1.5%, but this was really quite consistent through this whole interval. It's basically 4 grams gold, 4.3 grams to be precise, and 0.25% cobalt or 2,500 parts per million cobalt. It's about the same value in the cobalt as the gold here, whereas generally it's only added 15 to 20%. That cobalt is becoming richer. The gold's not dropping off, but the cobalt's becoming richer.

Not enough drilling to determine exactly what's happening here. We have a feeling that these cobalt-rich areas are on the periphery to high-grade gold cores. If that's the case, then there's a lot more gold to be found and we're on the periphery here of the higher grades. But that will require a lot more drilling to prove that theory. It looks like that from this prospect and others.

Just a reminder that this is one of the few cobalt resources in Europe that is 43-101 compliant. It's a very strategic project that's developing here for Europe. Extremely important for Finland which plays a huge role in the cobalt supply chain, producing 10% of refined cobalt from Kokkola, which is 400 kilometers down the road, a refinery. Today, 90% of that feedstock into Kokkola comes from the Democratic Republic of Congo and having a domestic source of cobalt is very important for the Finns. You can see that that's playing in very well also to the story.

Gerardo Del Real: You mentioned that more exploration will be needed to see if the hypotheses that you have this higher grade gold system elsewhere on the property. In order for that to play out, of course, you're going to have to move drills. I want to be absolutely clear to the market because I think that we all know that years ago, you have some permit issues that kind of constrained your ability to explore in some of the more prospective areas.

Obviously, this drill campaign has shown that you were indeed correct in highlighting the fact that you thought these areas were going to be highly prospective for gold. You got the cobalt surprise, which has been a nice sweetener obviously and an important contributor to the permitting.

What is the permit status for everybody that may be fuzzy about it? It's funny what people tend to remember and not remember when it comes to these things.

Michael Hudson: Exactly. We've been quite self-flagellating about our process to permit this. Simply put, we have a 3-year permit which we've used 6 months of. So we've got the next 2.5 years, which I believe will really make this project. Then there's extensions beyond that, but it just needs to be re-permitted every 3 years. This is a very strategic project for Finland so it's playing very well into that permitting dynamic also.

The situation is that 20% of the project, or 18% specifically, is in EU protected program called Natura 2000. Anglo-American, who are developing or going forward to developing a project north of us, are in one of those areas. There's many mines through Europe in these areas. They're not red flags to stop development, but they just take a few extra hurdles and then it comes down to the politics of any one country at the time.

We're permitted and we're permitted to drill this winter and this coming winter and the next winter. And also most importantly, and this will surprise you, this Palokas zone now is swinging north and that allows us – I should say, in Natura we're only permitted to drill during winter periods, but 80% of the property we're permitted to drill all year round. Palokas is swinging to the north and that allows us to target it from these summer and winter drill areas. That's a big breakthrough also. We're looking at how that can be done now, but this thing is getting deeper and then it just creates more options on how to extend it and drill it. That gives us summer and winter drill targets on these high-grade parts of the system.

Gerardo Del Real: Excellent. Now when you say that 18% of this project is within this protected area, I want to be clear to everybody that that other 82% is a massive land package to explore on. Can you provide a bit of context there before I let you go, Mike?

Michael Hudson: Most of gold has been found in that 18% to date, but this is a discovery in the making and these things are crafted. Kittilä, which is Agnico's largest, longest life mine that exists 150 kilometers north of this project, initially had a resource that was smaller than our maiden resource. Now that's close to an 8 million ounce system, going to 10 million ounces. That's what we can see here. We've got the ground tied up. We have for many years. We've got a very strong understanding of this system now.

As I mentioned, the limitation is just where we've collected data and that's very important in exploration. It's a research and development program and you only know what you know. But we know that there's a hell of lot more ground where these mineralized horizons trend into and they just haven't been drill tested.

The biggest gold anomaly in surface sampling actually exists in the middle between Rompas – where we drilled Finland's best ever drill hole back in 2011, 6 meters at 617 grams per tonne just below surface – and this project where we're defining multiple projects. They're separated by 8 kilometers. Half way in between that 8 kilometers is the biggest soil anomaly on the property. It's big and it's many kilometers by many kilometers and it hasn't been tested by any drilling.

Gerardo Del Real: In the words of our former Secretary of Defense and wordsmith Donald Rumsfeld, "There are known knowns, known unknowns and unknown unknowns." We'll leave it with that, Mike. Thank you so much for your time, sir.

Michael Hudson: Thank you, Gerardo.

View Interview Archive

Subscribe to the RSD email list and get the latest resource stock activity directly to your inbox, for free.

Part of the Stock Digest family of websites

Small Cap Stock Digest

MARKET SUMMARY

INDICES

Name Last Change
DOW 27773.40 0.17%
S&P 500 3103.47 0.16%
NASDAQ 8506.21 0.24%
TSX 16998.84 0.04%
TSX-V 528.62 0.00%

Resource Commodities

Name Last Change
Gold 1465.06 0.63%
Silver 17.12 0.23%
Copper 2.65 2.647
Platinum 901.00 0.67%
Oil 57.11 3.33%
Natural Gas 2.56 1.91%
Uranium 25.88 0.00%

@RSDigest ON TWITTER