Mawson Resources (TSX: MAW) CEO Michael Hudson on High-Grade Results from Aggressive Step-Out Drilling at the Rajapalot Gold-Cobalt Project in Finland

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 afternoon?

Michael Hudson: As always, top of the world down under. Thanks.

Gerardo Del Real: Some pretty impressive news here. You just announced that you drilled 4.9 meters of 18 grams per tonne gold, 1,236 ppm cobalt in the deepest intersection at Palokas, of course, in Finland. This comes on the heels of a resource estimate that I believe is still slated for an early Q3 release.

Before we get to that, can we talk about Hole 36 because I believe that's the deepest mineralized intersection that you've drilled at Palokas. Is that correct?

Michael Hudson: Correct. You've made my job easy today, Gerardo, as you normally do. It's showing continuity. The grades are obviously spectacular. These have context around other results over a few hundred meters, like 8 meters at 19 grams and 7 meters at 17 grams that we put up in the last month or so. 

It's a 250-meter step-out, this hole that we just announced. We've announced many holes, but the one we're talking about is a 250-meter step-out from the previous resource at Palokas. It's the deepest we've drilled an intersection at Palokas. It's 360 meters vertically, so it's still relatively shallow. It's not testing the Moho so there's a lot to go here. It's open down plunge. It's open towards the south where we've got another resource body, about 300 or 400 meters away called South Palokas. So it's a work in progress, but a very good work in progress.

Gerardo Del Real: You reported five holes today. The second one that's definitely worth talking about is Hole 216, which is 24 meters northeast of Hole 222, if I'm not mistaken. I believe that returned something like 4 meters of 6 grams per tonne gold and something along the lines of 6.3 grams per tonne gold equivalent from 262 meters. 

Let me ask you, Mike, you're getting further down into the system, the grade is absolutely there. How's the continuity holding up?

Michael Hudson: We're drilling at fairly broad spacing in one dimension. We're taking 120-meter step-outs. So that's very big step-outs in the gold world, but it does show the continuity and predictability of being able to hit this system in that down plunge orientation.

Across that or at 90 degrees, we're drilling in a little bit more detail. That second result you talked about, we're drilling at about 25-meter spacing across this section. So that 4 meters at 6 grams was 25 meters from an earlier result, which was 8 meters at 19. So that's pretty good, right? The continuity, ore bodies or mineralized bodies vary. They thicken and thin and that's what we're seeing. But they're still all very good grades and great thicknesses, so we're extremely pleased, I suppose.

The big question is just how all these high grades pull together. It is relatively early days, but we're seeing higher grade shoots within these plunging bodies starting to emerge as we drill more and more. Of course, we need to do a lot more drilling to really nail those down, but it looks very encouraging. You can't really ask for more than continuing to hit high grades over very good widths.

Gerardo Del Real: In total, you reported five holes today. The two obviously were spectacular. There were three where the the widths aren't there and the grade isn't there. For the devil's advocate group out there, can you speak to those holes and what you kind of learned from the distribution of the mineralization in those lower grade holes? What, if anything, of value are you picking up from that?

Michael Hudson: Near-misses or blanks in the technical world are as important as the hits, because if you can't start to define your edges of mineralization or a vector towards your higher grades, then you're lost, right? They're all helpful in the technical world. In 37 holes we're not going to hit 5 or 10 meters at 15 to 20 grams in every drill hole. The zone is still there. So that's important, right? The continuity of the mineralized horizon is continuous. It's not being faulted out, but there's controls on those grades that we're still in detail working out.

The truth is in any deposit, any ore body in the world, really it is only best understood when it's fully mined out is the absolute truth, right? So it's all a question of scale. We're trying to look at a bigger scale and build up a multimillion ounce discovery that's looking very good so far. Then it will be drilled out. Every time you drill it out by half the spacing, you've got to put four times as much drilling in when you go from inferred to indicated, and then to measured, which is the most solid or confident base, that's another halving of the data density that you need. So really it's 16 times more drilling before this thing can go into assured reserves. That's the amount of work that any deposit needs, rule of thumb.

Then when the mine geologists come here, if this is ever going to be a mine, it will be a lot more detail. They'll be mapping it at the scale where they're going underground every day and mapping 3 or 4 meters of new development every day. So it's all a matter of scale from an exploration geologist to a mine geologist.

Gerardo Del Real: Great context. Thank you for that, Mike. The 8 holes that are left to report on, when do you anticipate being able to publish results from those assays?

Michael Hudson: They'll come in the next few weeks, literally, next two weeks or something like that. I imagine two or three weeks maximum. We've had slight delays in shipping samples around the world. We get golds assayed in Finland and the multi-element is assayed in Vancouver. So there's been a slight delay, but not a major delay and they're starting to flow through.

We, of course, are working as we speak on putting together the geological model that will feed to the resource geologist, the independent qualified person who will complete the resource upgrade. That still looks on track for August.

Gerardo Del Real: You mentioned wanting to make this a multimillion ounce discovery. The next step is, of course, going to be the resource estimate that you just referenced. What about the way that these deposits are holding up thus far gives you confidence that you're well on your way to a 2 or 3 million ounce gold deposit?

Michael Hudson: Continuity and grade, basically. It's continuing to work, right? The thesis that we had at the start of this drill program was that we drill in these areas and they should contain gold. Well, they do. And the thesis continues that they should continue down plunge so they will continue to develop. As we've talked about, the mineralization will come and go. Ore bodies when they form, so bodies that are economic, have more hits than blanks. That's what we're seeing and that's the nature of developing or crafting one of these discoveries.

The other key is that we're finding more mineralization near surface. So we've got two new areas that one of them may come in in a small way to the resource upgrade. That's Rumajarvi and The Hut. But they need a hell of a lot more drilling over the next winter and that will happen. Then we've got a lot more EM to run. So that's the big thing. We're starting to run more EM over the next few weeks, 500 meters along strike from Palokas, where we've just talked that drilling. That's in areas where we're permitted to work during summer and winter. So that's pretty exciting. 

Then we'll go back this winter with a 20-kilometer drill program into these areas. It's not too far away again. We're already starting planning for that program starting in December. So, drilling in summer-permitted areas ideally in the next three months and then a big drill program, again, here to continue the resource expansion.

Gerardo Del Real: There's a lot of new eyes on the stock. For those that aren't familiar with the land package that you were able to put together, can you provide some context as to just how much exploration can be done? You've mentioned to me privately, I believe, that you could drill this land package out for over a decade. Is that correct?

Michael Hudson: Yeah, that was in one of my more sanguine moments perhaps, but it's a fair comment. Well, to understand that question, this is a long interview now, but we've got a strata-bound control mineralization. So it's hosted within one part of the stratigraphy, sort of 100 to 150 meter thick part of the stratigraphy. We know in the layer cake where it forms, but it's controlled by later structures, so where the later structures intersect that right part of the layer cake is where the gold drops out. We've got something like 65 kilometers of that layer cake stratigraphy to test within our prospects. So that's the mineralized horizon.

Now, it's not going to be mineralized over that 65 kilometers, but where those later structures deposit the gold, like they are at least in these 5 areas that we've got already, they start to develop things that are potentially economic. We've maybe tested 5% of the strata-bound horizon to date, so it's extremely early days. It's got scale across the land package, which is basically a 10 by 10 kilometer area with this sinuous host horizon snaking across the country. That's how we get 65 kilometers of that position across the whole land package.

Gerardo Del Real: You're cashed up, you have grade, you have width, you have continuity, you have catalysts, and we didn't even touch on Australia. We'll leave that for next time. Mike, thank you so much for your time. Is there anything else that you'd like to add?

Michael Hudson: Well, the other news of the day was we closed a private placement for $1 million dollars, which was run in parallel with the public offering of $17 million that we closed a week or so ago. That ends out the $18 million raise that we've just completed. So we are cashed up and we have the ability to execute with fervor over the next 18 to 24 months.

Gerardo Del Real: Looking forward to it. As a shareholder, I have to tell you, it felt like everything was in slow motion for a couple of years and now, all of a sudden, everything's moving at the same time. It's a good place to be. Thanks again, Mike.

Michael Hudson: Thanks, Gerardo.