Can you describe your company and say what it does?
Sunset Cove Mining (TSX: V.SSM, Stock Forum) is a junior exploration and development mining company operating in Peru, dedicated to driving shareholder value by taking a different approach to where value lies in a traditional industry. We see junior mining as a financial play where the greatest returns occur after discovery and before production and that is what we will be capitalizing on and how we provide shareholder value.
What distinguishes your company from others in your space?
Most mining companies are run by geologists/engineers who almost inevitably fall in love with their mines and want to bring them into production, a lengthy and capital intensive process. At Sunset Cove we intend to sell once we have established our reserves, taking full advantage of the discovery premium.
Can you explain why you have chosen to work in Peru?
We operate only in Peru for a number of very good reasons. Operating in more than one country means that you have to split your attention and may miss a development you should have seen. Peru has a strong mining culture and is very pro-mining.
When Marc Blais and I co-founded Sunset Cove in 2008, Marc had already been working in Peru for 13 years and had already established a network of Peruvian mining professionals that we could draw on as necessary.
That was a factor as was the nature of Peru itself. Only 15% of the country has been explored from a mining point of view. Ranked globally Peru comes in first for silver, third for copper and fifth for gold production. You go where the minerals are.
What is your flagship project?
Our flagship Carolay Silver Polymetallic Project, which has three mineralized zones on 5784 hectares, is a good example of how we work. We look for mines in established mining regions where production or successful exploration is ongoing. Carolay is near the Pataz Batholith, an internationally-known mining camp that has produced over six million ounces of gold.
It is close to roads, water and electricity, all the infrastructure a mine needs. We have kept the cost of entry down by using strategic option agreements to purchase the property.
The mineralization found on the Carolay property and the adjacent Marañon sector fits into the model of polymetallic veins and is similar to that found in the highly prospective Coeur D’Alene Silver District in Idaho, which historically has produced more silver than any other Silver District in the U.S.
In our first NI 43-101 report released last year we showed that the Carolay Vein averaged an economical grade of on average over 269 grams per tonne of silver. Recent surface samples taken from the newly discovered Carolay 4 show an average grade of 351.55g/tn Ag. One of the 22 samples taken in the drift showed 4,674g/tn Ag.
We are now launching an advanced diamond drill exploration program of up to 10,000 metres to produce a new NI 43-101 report and establish the first Carolay Resource Calculations, which should be ready in the Fall.
What are the main challenges that you face in operating your business?
Most mining companies find raising money a chore and that becomes a challenge for them, but because Marc and I come from the financial side of the mining industry it is something that we are at home with, and we are fully financed for the next two years. Our challenge is finding new properties and even there we have an advantage through the local networks we have built up, especially one of our board of directors, Arnaldo Leon Vega, who has worked in the mining industry for 35 years. You could say he’s our ace in the hole.
Between Marc and myself we have more than 30 years of experience in running public and private mining companies and raising the funds to keep them running.
Who are your competitors?
In the junior space there are numerous other companies doing the same type of exploration in different parts of the world. So I can’t say we have any direct competitors. But that said everyone is a competitor when it comes to financing, suppliers, contractors etc.
Who are the major shareholders of Sunset Cove Mining?
Marc Blais and myself own close to 9% and we have Pinetree, Alpha North, Winnington Capital, the Caisse de Depot and a group out of Geneva.
How much cash do you have on hand and what is your monthly cash burn rate?
Our cash on hand is close to $ 1.75 million. The burn rate when we are not drilling is only $50,000 to $55,000 a month.
Who are the key players on your management team?
Both Marc and I have put mines into production. We have a wholly-owned Peruvian subsidiary, Minera Sunset del Peru S.A.C. and that is really the heart of our operation. Our three employees are all Peruvians and they have more than 50 years of combined experience in the industry. We have a full-time mining engineer Bratzon Salvador and a full-time mining geologist Carlos Villon as well as a full-time general manager. Not every junior miner has all three and that sets us apart as well.
We are very optimistic about the results we have already seen and highly optimistic about what the next exploration campaign will show.
What kind of experience do they bring to the table?
The team has the experience to evaluate a property with the experience it has garnered with our experience with over 100+ years and over 15 companies in the precious and base metals sectors in Peru and Canada – both in exploration and production.
Disclosure: Sunset Cove Mining is a Stockhouse client