Abacus Mining CEO Interview: Permits and Promising Properties - Part 1
Publisher's Note: Today we have the first of two parts of Gerardo Del Real's interview with Mr. Michael McInnis, Executive Chairman of Abacus Mining and Exploration (TSX-V:AME) (OTC:ABCFF).
Today and tomorrow, we'll see how Abacus is reacting to a permitting setback, along with how its Willow property may revive a copper mining property in a historic corner of Nevada.
To your wealth,
Publisher, Outsider Club
Gerardo Del Real: This is Gerardo Del Real with the Outsider Club. Joining me today is Executive Chairman of Abacus Mining and Exploration, Mr. Michael McInnis. Mike, how are you this afternoon?
Mike McInnis: Doing well, Gerardo, how are you doing?
Gerardo Del Real: I am doing excellent. I want to thank you for your time today. Outsider Club readers will know that Abacus Mining is a company that — full-disclosure, I'm a shareholder of — was a top pick for my Junior Mining Monthly newsletter.
That was predicated on a two-part dance, and the first part of that dance was the permit at Ajax that we anticipated would come in December.
That permitting decision obviously went against us. The permit was denied. Before we talk about all the exciting news at Willow, which is part two of this dance, I wanna talk about Ajax and just get your thoughts on what happened and where we're at as far as the project goes.
Mike McInnis: Happy to, Gerardo. Thanks for the opportunity to talk with you and give people an update on where we are.
As you've already pointed out, the permit decision was not in our favor. Very disappointing. We thought we had done a superb job on the report, the environmental report, and when we looked at the actions to see what happened, our view was it was two-fold.
One was a political decision. The current government in British Columbia is supported by the Green Party. There is a certain element within both the party and the Green Party that really does not favor a lot of development projects.
The second element was the First Nations, one in particular. We were doing well with the other three bands, but one of them was a bit recalcitrant and we didn't get a deal done before the application went in.
Thinking about this after the fact, we thought, "Okay, let's not just sit back and wait for a government change that'll get it back on the rails, let's see what we can do in the interim." We're looking at a strategy — in its early days, I have to emphasize — but we're engaged with a large environmental group with a view that we may be able to get them to work with the First Nations and ourselves to come up with a broader agreement on what every party might get out of this.
If we're successful at that, I would take it back to the government, along with our partners on this thing, and see if we can get that permit re-looked at. We're not sitting by, we have a plan we're working on, and we'll keep you posted on any developments in that area.
Gerardo Del Real: And I want to provide a bit of context. Abacus owns 20% of a project that has an after-tax net present value, at 5%, of $543 million. That's U.S. Abacus currently has a market cap of U.S. approximately $9 million. Again, I want to stress the fact that you still own the 20%, the permit decision obviously did not go your way, but you do have a plan in place and it sounds like something that you're working on Mike?
Mike McInnis: That's correct Gerardo. We have that 20%, it's carried, so there's no cost to us going forward. At such a time as the permit comes back, we expect a new government would approve it actually quite readily. In fact, before the election we'd already been given signals the permit was going to be given, so it was a bit of a bad change in the government, but at the end of the day we're going to see what we can do to get it back on the rails.
Gerardo Del Real: Well, that's excellent Mike. Let's talk about part two.
Part two is Willow, and Willow — just a bit of background — is a property that I've been familiar with since 2010. Almaden Minerals, which was then spun out into Almadex Minerals, had this as part of their exploration portfolio. And it was staked by Dr. Duane and Morgan Poliquin, the father/son team that ran Almaden at the time and now Almadex.