Magna Gold (TSX-V: MGR) CEO Arturo Bonillas on 2020 Exploration Plans at the Mercedes & San Judas Properties, Continued M&A Pursuit and Current Climate for Miners in Sonora, Mexico

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the President and CEO of Magna Gold (TSX-V: MGR)(OTC: MGLQF), Senor Arturo Bonillas. Arturo, feliz ano nuevo. Buenas tardes. Como estas?

Arturo Bonillas: Feliz ano nuevo, Gerardo. Always a pleasure.

Gerardo Del Real: That's "Happy New Year," obviously, for all my English-speaking friends. Arturo, you've been very busy both publicly and privately.

So, I want us to take a step back and go back to the end of November, where you updated everyone on work on the Mercedes property in Sonora, Mexico, which yielded surface samples up to 63 grams gold per tonne over 1.2 meters. I know that's a property that you're excited about. There're several targets there that include four main areas; La Lamosa, Mina De Oro, Salto Colorado and La Cueva/Noche Buena.

Can we talk about Mercedes first before we talk about the most recent news from San Judas?

Arturo Bonillas: Of course, Gerardo. And before that, a little corporate update. We have been working very hard on positioning our young company, and we are accomplishing good results here. We are now mining properties in two very prolific districts in Mexico. The Sierra Madre Gold Belt, where the Mercedes property is, and also the San Judas project in the Mojave Sonora Mega Shear. So I'm very happy where we're at, and we have been uncovering and confirming geological concepts that have us very excited.

On the Mercedes property, we drilled successfully our first target, which was at La Lamosa area, a hill that all outcrops with 1-gram gold mineralization. We completed our first phase, and we are ready to continue with a second phase. We are also carrying out some metallurgical test work, an initial metallurgical test work.

In the entire property, Mercedes, now we can sector them in two areas. One area, which is the area where we have some gold and silver near surface, indicative of high sulphidation epithermal systems, and we have confirmed that by drilling. Those areas, the near surface La Lamosa, which we've drilled, and we have Mina De Oro now which will be our next drilling target along with La Lamosa.

And then also within the Mercedes Project we have a system of gold, silver, all-metallic quartz tourmaline structured-controlled breccia system with high-grade mineralization. We find very high grade in some of those structures, it's all in breccia, of course tourmaline breccia. The areas that we have now identified and we are after as far as work for Salto Colorado, Noche Buena, La Cueva and another one which is called La Olvidada.

We are now preparing a work program for the first quarter of next year, and we shall have that ready within the next few weeks. Our press releases show the diagrams, the cross sections, and our concepts of what we have there. So we're very, very happy with what we've encountered in Mercedes.

At the same time, we acquired and we announced yesterday that we closed the acquisition of San Judas property. San Judas is located in the Mojave Sonora Mega Shear. As you know, we're very familiar with that area. Our conceptual model is being confirmed by a lot of work that we've done. We've taken more than 400 samples now. We are coming up with a model that shall be drilled also early next year, aimed at both low-grade gold-silver open-pit mining leachable, and it's very similar to other pits that we've looked at in the area.

So, in a nutshell, that's where we're at, and we will continue to do the work at a good pace. It's only been a little more than six months since we really started work, because we're a public company, and I think we've made a lot of advances.

Gerardo Del Real: Sorry to cut you off there, Arturo, but I have to say the company should be commended. You've been busy, you've positioned shareholders very, very well for this new gold bull market and, frankly, I think the best days are ahead of you. You have a tiny market cap, shares are trading at approximately $0.30. I think this is a story that will pick a lot of steam, and will get noticed relatively soon in this better gold environment.

I have to ask you something about San Judas. In the press release you say, "The address is right, the rocks are right, and the assays are right, and the expectation for San Judas is a tier 1 exploration property." I don't hear that often from somebody as accomplished as you.

I've made the joke over and over, and I'll continue to do so, the analogy that you are seeking to become the Michael Jordan of exploration, right? The last five times that you've set out to develop a property and a deposit, you've managed to put it into production and you're going for ring number six. Tell me why you believe San Judas is a tier 1 exploration property?

Arturo Bonillas: Well, the knowledge of the geological concept that we have for the area has been validated by us in the neighboring mines. The rocks are so familiar, the geology so familiar, that it's a tier 1 property because it will be ready much sooner than we had expected. That is, I'm very, very optimistic of what we have there.

As I'd mentioned to you before, we want to be in production soon, and I think this could be a possibility, not this year, but we will be confirming, possibly, a very nice ore body there. We need to drill it, of course. But I'm very excited, we're in the right spot.

Gerardo Del Real: So to summarize; drilling for Mercedes, drilling for San Judas. I have to ask one more thing, actually two more questions. The first one is, I know you and I have spoken several times throughout the year. You've made it very clear to me that you plan on using that extensive Rolodex to take advantage of a perceived risk in Mexico and that's going to be my second question. We'll talk about that in a second, but I know that you plan on taking advantage of companies and assets that, maybe, other less-experienced teams are not able to develop, and you're on the M&A trail. You've been very frank and honest about that.

Is that still something that you're pursuing, given that you have two quality exploration properties that you plan on drilling this year?

Arturo Bonillas: Absolutely yes. We are very, very active, more than ever, on the M&A space. We are looking at very interesting mines, very interesting developments that, for one reason or another, have had to stop, or they were operating and there were problems, whatever reasons. But that's lots of opportunities, and we are very, very active, more than ever, to pursue a more advanced situation. Yes, of course.

Gerardo Del Real: Excellent. My second question, Arturo, there is a perceived heightened risk in parts of Mexico due to recent developments, both publicly and privately. I know privately there are several companies that are looking to liquidate quality assets to focus on other jurisdictions. You're in Hermosillo right now, if I'm not mistaken.

Can you provide a boots-on-the-ground update as to the climate and the environment as it relates to exploration companies in Mexico, specifically where you're at, which is, of course, where you have your finger on the pulse the most, right?

Arturo Bonillas: That is correct. We are probably in the best jurisdiction in Mexico for mining, the most supportive. We have not had or do not expect to have any problems, security problems or otherwise. We have very good relationships with the surface owners, as we've always had and been able to manage that.

In general, mining will be very important, will continue to be very important for the country. There have been certain adjustments to mining practices more than mining law, and they all seem very positive to me. The President of Mexico is supportive of mining, has just shown that everywhere publicly. We just have to continue doing what we're doing. We work carefully and we comply with the law. We all have to be very careful. It's our responsibility to operate in a safe environment as far as the ecological care of areas. So what the new government is asking is, "Please, you do the work, do it properly, do not contaminate, and pay well." So that's what we do and have always done that. I'm very optimistic on the future of mining in Mexico.

Gerardo Del Real: And again, you aren't someone that's new to the area. You've worked in mining in Mexico, how many decades, Arturo? Just to provide context for people that are newer to the Magna and Arturo Bonillas' story.

Arturo Bonillas: Oh, since 1980. I became independent in 1993, well, we can say independent, an entrepreneur in mining. So I've been around many years, I've been in the country in many areas and so I'm not afraid. I'm very, very optimistic, as I've said, and I feel very certain about things. There's nothing that keeps me from not sleeping.

Gerardo Del Real: Excellent, excellent. That's exactly what I wanted to be able to communicate to everybody. Arturo, I know that you're busy on the M&A trail, I know you're busy with your two quality properties.

I still have not made it down there, but I plan to in the next couple of months to, hopefully, be able to explore both exploration properties. And depending on the M&A that is in the works behind the scenes, if any of that comes to fruition between now and then, I plan on making a visit to that or those properties as well.

I want to thank you for your time and I'm excited for Magna in 2020. I think shareholders are in for a heck of a year. Is there anything else that you'd like to add?

Arturo Bonillas: No. Just thank you, Gerardo. I hope to see you here soon. It is the best time of the year to come, and you will be surprised with the properties that we have and our team. I'll take you to the communities. I really hope you can come soon. Thank you very much for the interview.

Gerardo Del Real: Thank you again, Arturo. I'm looking forward to it. Always a pleasure.

Arturo Bonillas: Oh, it's a pleasure. Thank you.