Magna Gold (TSX-V: MGR) CEO Arturo Bonillas on Strong Results from Phase One Exploration Program at the Mercedes Property in 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), Mr. Arturo Bonillas. Arturo, buenas tardes. How are you sir?
Arturo Bonillas: Buenas tardes, Gerardo. As promised we're here after the results, and I'm very happy to talk to you again.
Gerardo Del Real: Thank you very much for taking the time and the opportunity. As you mentioned, the last time we spoke, we promised to touch base once we had initial assays from the ongoing phase one exploration program at the Mercedes property. There were two pieces from this news release that really stood out to me and that I was excited to see.
The first was what I perceive as confirmation from the twinning of the historic holes, which returned, frankly, some excellent, excellent intercepts. You were very keen on articulating that you're looking for near-surface oxidized ounces that in this part of Mexico are very, very economic. I got to say, to my amateur eye, it looks you achieved that goal.
From surface, hole 19-004 intercepted approximately 118.87 meters of 0.98 grams per tonne gold equivalent. If you want to break that down further, that was 0.46 grams per tonne gold, and 42.6 grams per tonne silver. True width was estimated at 59.44 meters. Hole 19-003 from surface was approximately 120.4 meters of 0.81 grams per tonne gold equivalent, or 0.54 grams per tonne gold and 22.4 grams per tonne silver.
I have to believe that the twin holes confirmed what you were looking for. I'd love to hear your take on that. And then we'll talk about some of the exploration holes and the new targets you've identified.
Arturo Bonillas: Of course. Thank you very much. I'm glad to say that the objectives of the first phase exploration were fully accomplished. The numbers that you read are in our press release. We are still receiving samples and assays from the last four holes. They look pretty good.
We can say now that we have confirmed on-surface mineralized oxide area with the similar grades, as the ones you mentioned along 300 meters, along strike, 40 to 60 meters wide. And so, the next there is we went to do an initial resource estimate, which is quite preliminary because we not only did the twin holes, we also reconfirmed some of the historical drilling, and we are extending with the latter holes of that portion that we had talked about. One of the new things that came up is that silver values were higher than previously reported.
So, we are currently assessing what we accomplished there to fully come up with, at this stage, a very preliminary, a block model with certain ounces. And the second portion of this exploration program was the uncovering of very interesting areas within our claims. We uncovered 7 targets, all came back with very good rates on our initial sampling. Some of them are very, very high grades.
And so, our next phase of work at the Mercedes Project will be to go in and systematically sample two of the areas. Initially, one is called Mina Vieja, which is an old mine, that we are uncovering. We're cleaning it up and going inside.
Also, we're uncovering the surface structure with those. The surface structure runs along 400 meters. I repeat that the Mina Vieja target is announced our press release.
The other target is also a very interesting area that we call Salto Colorado. We have extremely high grades of copper, and we also have very, very high grades of silver, and, of course, we have good reports in gold.
So, that's only the first two areas that we will tackle. And so, as far as Mercedes, we should have real targets in by January, early in the year, additional targets for those three areas. Lamosa, Mina Vieira and Salto Colorado.
Gerardo Del Real: Oh. Sorry to cut you off there, Arturo. I wanted provide a little bit of context. You mentioned the high gold, silver, copper, and lead grades. Specifically at Mina Vieira and at the Salto Colorado target, just for some perspective here everybody, the Salto Colorado channel sample was 2 meters that sampled 1.18 grams per tonne gold, 389 grams per tonne silver, 2.65% copper, and 3.9% lead.
That's indicative of some of the higher grade, very intense systems in part of Mexico. Arturo, can you talk about analogs?
Arturo Bonillas: Analogs in Mexico, I think that those high grades are part of potentially a porphyry. We are still trying to determine what type of geologic phenomenon we have there. We're currently finding out those very high grades in contact zones between the intrusions and acidic rocks, but we also have parallel zones that they show up as similar mineralization as Lamosa, and I can say that we have a lot of little targets, but we have put them in in conjunction with others.
So, we put 7 targets, but we have coarse tourmaline on surface, good reports on the gold. I think this is unique, and this is unique of the Sierra Madre, and there's a much bigger story here that we are really gearing up to uncover.
Gerardo Del Real: Excellent. It sounds like you have a lot of work between and the new year in addition to the work at Mercedes, which is exciting enough. You are also still hot on the M&A trail as I understand it.
How are things coming along on that front? You of course, just brought in the San Judas project recently, and I understand there's still eyeballs looking around at other things that may be attractive and appealing to you in this part of the world.
Arturo Bonillas: Oh, yes. So, we are advancing quite well on the M&A part of the business. We will hope they will have some news. It's hard to say because it takes time – negotiations – but we looked at some news before the end of the year, and I'm very excited about that. That provides us another platform.
But while we finalize negotiations there, I'd like to talk about the other properties that we announced called the San Judas Property. That's a property as I said before, located in the heart of the Sonora Orogenic Gold Belt or otherwise known as the Mojave Sonora Mega Shear, where there are several million ounces deposits, and a lot of exploration in the past, and then they're coming back again.
And we are very interested in moving fast because we know the area, we have a lot of experience in that specific area with previous mines we operated there, and that we were finally able to get a hold and sign an LOI, which is binding, and we'll be executing in option agreements. And also, then we will have two targets also for that area. So, we'll be quite busy.
And so, by the first quarter of next year, we should have our drills turning again, and we can hopefully by then also have completed the acquisition.
Gerardo Del Real: Now, San Judas is interesting to me because although it's an early-stage exploration project, as you mentioned, you have a lot of experience with these types of projects. And I noticed in the news release that you mentioned the structures are very similar in age to La Herradura in the San Francisco gold mines, which are nearby.
Can you speak to that a little bit because that's an important fact, and I got to think an important factor in why you brought the project in?
Arturo Bonillas: Yes. We are in an area which – and I'll speak a little bit technically here and of the metallogenic events – which deposited high-level meso and epothermal systems. And what I like about it is that it comes in all rock types, including the Precambrian bases and sediments that we produced. We extracted at the San Francisco mine previously in gold, and the same assemblages of the Jurassic and Cretaceous deposits.
So, these are deposits include good global grade tonnages. 0.6 to 1 gram gold, amenable to heap leaching. But they also contain high-grade shoots similar to the one that we found in the nearby San Francisco mine. And so, there's a lot of similarities.
And also, many companies have tried to get it, many companies had visited it. And we have now copies of all the reports that those companies produced given to us by the owner. So, I think it will move fast. I think that we will be able to set up very good dual targets, as I said, by the first quarter of next year.
So, that's we're doing, and we're busy.
Gerardo Del Real: It's been extremely busy. Extremely busy. The news flows fantastic, and it's in part why I still haven't been able to make it out there. One, how busy you've been on your end. And two, of course, it's that time of the year where the conference circuit picks up.
But I'm excited about everything the company is doing. You have a market cap, a minuscule market cap of approximately $11 million. What does the cash position look as of the latest reporting period, Arturo?
Arturo Bonillas: We have over $2.2 million approximately still left. We have enough money to go into the work that I mentioned to you, and put the first holes. But another financing event may come in between with our M&A activity.
Gerardo Del Real: Excellent. Arturo, I'm looking forward to getting down there in the next several months. Thank you again for taking time today. I'm looking forward to the remaining holes that are pending. From how I understand it, you've seen the rocks, you know what it looks like, but we all know that it doesn't matter until we have the assays in hand, right?
Arturo Bonillas: Yes. The initial assays for those two holes came back on gold and look very good, but we have to wait for all of the elements that we request, and we should be putting out another corporate update from this camp, and announce the work programs that we have upcoming.
Gerardo Del Real: Excellent. Arturo, it's a pleasure as always, sir.
Arturo Bonillas: Thank you very much, Gerardo