ALX Resources (TSX-V: AL) CEO Warren Stanyer on Option Agreement with Rio Tinto at the Renamed Firebird Nickel Project in Saskatchewan
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the Chairman and CEO of ALX Resources (TSX-V: AL)(OTC: ALXEF), Mr. Warren Stanyer. Warren, I would ask you how you are, but I suspect that you are doing better than the last time I spoke with you on the back of the good news this morning.
Warren Stanyer: Well, it's a beautiful day, but sometimes you have to get up real early for a day like today. We did well. We announced our deal with Rio Tinto Exploration Canada, Inc. We now have a deal with the second largest mining company in the world. I think their market cap is about $200 billion. So that's not a bad thing,
Gerardo Del Real: Not a bad thing. I noticed that the two companies have agreed to change the name of the Falcon Nickel Project to the Firebird Nickel Project. Can you speak to that a bit? Then let's talk about the way the deal is structured, because it's somewhat shareholder-friendly in the sense that you're going to get quite a significant investment into the property to start discovering what's there almost immediately.
Warren Stanyer: Yes. At this point, there's a commitment that they want to do an airborne survey. That's going to help decide where the targets are in the north, where we think the higher grades of nickel are. It's really underexplored up there.
By the way, they're changing the name, it occurred because F-A-L-C, Fort a la Corne, was named Falcon when Rio Tinto came into the diamond play. The world's largest kimberlites are in Saskatchewan. So when we first started talking, they said, "We'll have to change the name." Falcon was the name of a guitar, as is Flying-V, which is our other property in that area. So now Firebird is also a guitar. It's a nice image of a mythical creature that's fiery and hot and magmatic.
Gerardo Del Real: Makes for a good story. What makes for a better story is a significant discovery. Warren, I understand that airborne survey is going to cover almost 20,000 acres, right? 8,000 hectares or so?
Warren Stanyer: Yeah, that's right. The northern part of our property, the last part that we added on and the one that has the Wiley Lake showing, which was almost overlooked by everyone, it's something that has high grades of nickel, much like Currie Lake, but nobody really paid any attention to it. It's never been flown.
We're going to get the latest and greatest helicopter-borne EM survey over this property. I just think there's going to be a smorgasbord of targets. I'm an eternal optimist. I believe that there's high-grade nickel in the area and people just didn't use these tools in the past. Those are the tools we have at our fingertips.
Gerardo Del Real: Rio Tinto will earn into 51% by funding $3 million within 3 years. Correct?
Warren Stanyer: That's right. If they decide to form a joint venture, then we're responsible for 49%. I would say generally the bigger companies want to move to 80. If we're having success, we should be able to fund our share of the programs. Continued success means continued investor interest. It's that next $9 million that would really help define the project as they earn towards 80%.
Gerardo Del Real: As I understand it, Warren, Rio Tinto will be the operator of exploration, but they can designate ALX to actually become the operator at any time during the first or second option period. Correct?
Warren Stanyer: That's right. They have very high standards, so I hope that we can meet those standards in terms of their protocols and all the health and safety that's built into their corporate integrity statements. They just have a very high standard for their employees. So they're comfortable with their own group and to be accepted into that group would be a great thing for us.
Gerardo Del Real: Absolutely. What does the rest of the year hold in store for shareholders? This obviously was well received by the market. I think you traded north of a million shares today. You were up at one point over 20%, you closed up nearly 17%. Heck of a day for the shares, but I know there's a lot more in the pipeline.
Warren Stanyer: Yeah. Now that Falcon is in good hands and whether we operate or not, it leaves us free to look at our gold projects that we've been developing. We've got a couple up our sleeve, I suppose, and we're looking at some new ones, all in Saskatchewan. Saskatchewan is a great place to work as Rio Tinto is showing the world. They now have three active projects in Saskatchewan; the Fort a la Corne diamond play (Falcon), the Janice Lake, which is Forum Energy Metals, the copper deposit there that they're drilling, and now Firebird.
Gerardo Del Real: A lot to look forward to. Warren, anything else that you'd like to add? Congrats again. I know it's not an easy task to get these deals across the finish line with a major like this.
Warren Stanyer: Well, I think that they have a really good group over there. They looked at our samples that we first brought in in October and showed them. Then they realized these have the grade, they have what's called the nickel tenor, that is the percentage of nickel in the sulfides that meets the world's standard for what could be mines in the area. They're taking a chance and I applaud them for it because that's what it's all about. It's risk taking. We're prospecting with the best science and the best tools. I'm just really pleased that we managed to bring this deal to fruition.
Gerardo Del Real: Well done, Warren. We'll talk again soon. Thank you.
Warren Stanyer: Thank you, Gerardo. All the best down in Texas.
Gerardo Del Real: Same your way, though I think you've got it a bit better than we do right now.
Warren Stanyer: Yeah, I think so. But anyway, the weather's nice. I hope it is for you too.
Gerardo Del Real: It's great, no complaints. Cheers, Warren. Thanks and congrats again.
Warren Stanyer: Thank you, Gerardo. Take care.