Mawson Resources (TSX: MAW) CEO Michael Hudson after Closing $7.9 Million Financing: “We Have Clear Runway to Develop What We See as a Significant Deposit”
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today, after a long absence, is the Chairman and CEO of Mawson Resources (TSX: MAW)(OTC: MWSNF), Mr. Michael Hudson. Michael, where have you been? How have you been?
Michael Hudson: Thanks, Gerardo. I've been good and busy.
Gerardo Del Real: I know you have. We bumped into each other at Beaver Creek a few months back. I know that you've been working hard. I asked the question that I knew the answer to, of course. I know that you've been working hard on closing this brokered financing. Congratulations, you closed a $7.9 million financing in what has to be the most bearish bull market ever. Right?
Michael Hudson: Bearish bull market? Indeed it's been a challenge. I reflect on the money I've raised over the last 20 years and I'd say it's a lot more personal. It's a lot more granular and you really must be very sharp on your business strategy, very upfront and frank on the upside and downside.
We've been very fortunate to get new groups to the table as well as existing shareholders. I feel very graciously thankful that they all see the vision and support the strategy going forward with this asset in Finland.
Gerardo Del Real: I'm excited, and let me tell you why. We had a conversation off air where I told you that I'm considering and will be selling several companies in the portfolio that say they're explorers but prefer to not explore. I completely understand the rationale for those companies, but frankly this is the time to put up or get out. Right?
You are putting up, sir. You have commenced a resource expansion drilling program in Northern Finland to the tune of 15,000 meters. I believe that the first diamond drill rig is either onsite, or on the way. I'm excited for this program because something changed. There was a step change last year, and I think it happened either in the second or third quarter, I don't recall. But you figured out and you really understood it, got a better understanding about the high-grade gold mineralization and the structures.
Can we talk a bit about the details of the program? And then why – hopefully I'm right – why I believe you're going to be able to expand that maiden resource that you published last year in December of 2018 rather quickly. Because again, I believe you have a much better control of the system this year around.
Michael Hudson: Yeah. 80-plus percent of drilling has gone into this project over the last two and a half years. That's led to a hugely increased understanding of the mineralization and its association with geophysical conductors. The geological understanding came only at the end of the last drill season, which was earlier this year where we put 44 holes in. 8 of the best holes of that program came in the last 12 holes, as we crack the code. So, we now are on a runway.
We basically had a resource out that was between 400,000 to 500,000 ounces of gold. That was the initial resource in December 2018. There were 15 kilometers in that resource – you'll hear 15 a lot here – 15 kilometers in the resource. We doubled the meters into the project earlier this year and now we're sitting at an exploration target.
We haven't updated the resource because we need to infill around large step-outs, but we figure in terms of volume and exploration target that is a much lower level of confidence. But, just to give people some guidance we're around 800,000 to 1 million ounces, we think, in the ground, which needs to be infilled and confirmed around that conceptual target. But that's where we believe we are now. And then we're drilling infill and beyond that.
So we can see ourselves going north of that in this drill program, and that will lead to an updated resource at the end of this program. So at the end of Q2 2020 we'll put out an updated resource. The effective drill targeting method that we have has de-risked the project. We've gone from exploration and a science experiment to initial resource, to resource expansion, and resource expansion with controls, which has really been the secret that you identified.
We closed the financing last week. The first rig is already at site. We'll increase one rig to four over the coming month or two as winter conditions improve and give us access to these areas.
Gerardo Del Real: In fairness, Mike, it wasn't I who identified it. It was you and Mr. Cook. So, congrats on that front as well. I think it's important to note that Mawson is now permitted within four exploration permit areas for all year-round drilling. I believe this is the longest and best permit that you've received in this area. Is that accurate?
Michael Hudson: Yeah, we've been permitted for the last three years and we've got three years ahead of us. We've got over 500 different platforms we can drill on. We've got a clear runway for this drill program, and then another winter ahead of us before we need to renew that permit, so that just takes that permitting risk off the table. We've got the clear runway to develop what we see as a significant deposit developing.
We've got Europe's largest gold mine down the road at the 7 million ounce Kittila system of Agnico's. We can see how they started developing that project 20 years ago. That started off with 300,000 ounces and then grew very quickly to the point where Agnico took it out a few years after that, and now it's a 7 million ounce system. Although the geologies and age of gold is similar we can see this system developing in a similar way. Right? It just needs lots of drilling to build these systems and they tend to go to depth. The continuity is good and the grade is good.
Gerardo Del Real: Can we talk a bit and touch on exploration and mining in Finland? I know Joe Mazumdar of Exploration Insights, someone whom I respect tremendously, in a newsletter I recommend everybody read recently made note of his trip out there and talked about – and I hate to put words in his mouth – but talked about the potential in the region and how it checks a lot of the boxes.
Can you explain why that is, Mike? You've been there for quite a while.
Michael Hudson: Yeah, I've been there longer than most. I first went into Scandinavia 20 years ago, or to the Nordic countries I should say. Scandinavia is not Finland, but the Nordic countries being Sweden and Finland. We first went into to Finland in 2007 and took hold of this project when it was very, very early stages in 2010. Have raised more than $100 million dollars over that period of time for exploration projects in these countries. So know it well, saw the opportunity early, but now it's really starting to take off. And having a pool of companies exploring there and making discoveries has helped enormously.
Simply put, gold exploration only started in the mid-'80s in Finland. It's got all the right rocks, all the right rocks like West Africa, like the Tanami in Australia, or the Homestake area in the US. So, the same age rocks, with the same age gold that was one of the most prolific times in the Earth's history. It's got 99% glacial till or soil cover, so only 1% of the rocks come to surface. So there's huge potential. Most of the mines, if not all, have been found in that 1%. So 99% essentially remains under just these few meters of glacial till that puts a blindfold on exploration.
And then, despite gold exploration only starting in the '80s, so relatively being underdone, it is a mining country and culture. They've had over 400 years of mining. They say that 90% of the underground mines in the world have either Finnish or Swedish technology. That's a result of having that long mining industry. So, a very mature terrain, the rule of law is very strong, resource culture with huge amounts of upside with the right rocks, and really the first wave of commercial exploration really has only been the last decade and it's really ramping up now. So, it is a great place to explore and a little chilly for an Australian, but that's about all I can complain about.
Gerardo Del Real: I saw a sign and please take no offense, it was just funny. I saw a sign the other day that said oh, I'm going to have to remember what it is, but I'll share it with you a little bit later on. I'm trying to recall here, but it was absolutely hilarious about Finland and Australians and Texans and the commonality. But, let me get it right because I want to make sure it's delivered appropriately.
Mike, you're drilling, you're cashed up. When can we anticipate assays? You worked so hard to put this financing package together, and to get it across the line, and of course the impatient market is going to want to know when do you think assays will start flowing back in?
Michael Hudson: Yeah, fully permitted, fully funded, drill rigs turning, assays ideally before Christmas. If not, it will be just after Christmas in the new year. It really relies on just the speed of drilling and how we can turn that around as the year's coming to an end quickly, but towards the end of the year or early in the new year at the very latest.
Gerardo Del Real: Fantastic. Mr. Hudson, good chatting with you again. Thank you so much for coming on.
Michael Hudson: Thanks a lot, Gerardo.