What’s been keeping you busy today, Jeff?
This week the focus of Precipitate Gold (TSX: V.PRG, Stock Forum) has been getting prepped for the PDAC conference in Toronto next week. I am doing a presentation at a conference that takes place before the PDAC and then it’s a pretty steady schedule of meetings and one-on-ones while in Toronto because it’s a fairly rare opportunity to get our entire industry together in one place. It’s a really good opportunity to make contact with a number of people whom you might otherwise have difficulty getting in front of.
Who owns your company?
We are a fairly new company and we have been trading for less than a year. At this point we’re still quite largely held by founders and insiders to the tune of about 50% of issued and outstanding stock held in those hands. Outside of that our float of about 8 to 10 million shares is held primarily through retail investors. There are no institutional holdings of any consequence. It is primarily held by retail, insiders and founders.
Can you describe your company and say what it does?
We are a mineral exploration company. Our focus is on acquiring, advancing highly prospective precious metals prospects. We want to stay focused in jurisdictions where we feel there’s the best return on investment. We like to be in places where there is no mineral endowment, we like regions of the world where there is year-round access, and of course as with everyone else, we want to ensure that jurisdictions that we work in are geo-politically stable, that mining policies are clear and well documented.
You are located in one of the world’s most prolific areas for gold mining. What distinguishes Precipitate Gold Corp. from other companies in your space?
Being active in the Dominican Republic sets us apart from a lot of other companies. This is a region that’s really only emerged with prominence in junior space in the last year to year and a half. This has really been hinged on two significant events; one is Gold Corp. and Barrick have moved forward a quite sizeable deposit in that country to the tune of about 20 million ounces gold. That’s put a lot of eyeballs on the region, the fact that they’ve been able to get that up and running and started production on that asset in January, has brought renewed attention to this area. The other one is a company called GoldQuest Mining Corp., which made a significant discovery last spring on a project called the Romero Discovery. This is a project that was reporting world-class drill intervals, which drew an awful lot of attention to the area. What sets us apart in terms of that region and the work we are doing there are our main assets are located adjacent to that GoldQuest Mining Corp. ground. What I would consider to be the most notable new discovery maybe in the market last year, certainly in that country, is the Romero Discovery and we’re situated right up against the concession boundaries of GoldQuest Mining Corp. ground.
What is your flagship project? And what stage is the project at?
Our flagship project is twofold. It is our two projects adjacent to GoldQuest Mining Corp., in the Dominican Republic, the Juan de Herrera and the Hato Nuevo. Those projects are both at relatively early exploration stage. They are projects that have seen some prior work in terms of sampling and mapping, but very little. Part of our mandate in acquiring those projects is primarily, and admittedly, on their location adjacent to GoldQuest Mining Corp. We wanted to go in and do more detailed mapping, sampling and identify what was going on there from a geological standpoint. We reported in January, of this year, the first pass of results from that program. We are quite pleased with some of the initial numbers we got back in gold and silver samples from grabs and chip samples.
In a recent news release regarding your surface sampling program on your Dominican Republic assets, you had some favourable results. What can you tell me about the results (6.3 g/t Au)?
We are very pleased that these assets have advanced rapidly from an acquisition of being potential perspective ground to returning sample numbers of some real merit. Through our sampling program that we did throughout our two concessions in the Dominican, two areas have arisen as being areas of interest or showings where we are identifying a significant anomalous mineralization at surface. Those two areas, or showings, we are calling Melchor zone and Ginger Ridge zone. At Melchor zone, which was the first batch of results that we announced in January, we were getting grab samples to 6.3 g/t Au. Up at Ginger Ridge zone we are getting increased elevations of precious metal values where we are getting up to 11.8 g/t Au and over 100 g/t silver in samples taken from those two areas. Specific to Ginger Ridge, which has the higher grades being returned, the samples that have been returned in that zone are also over quite a substantial strike length. That Ginger Ridge strikes about 1.1 km and there’s quite a substantial area of interest there that is going to require follow work. We will go back into Ginger Ridge and Melchor zones to do more detail mapping and sampling within those specific regions and see if we can identify consistency of that kind of mineralization.
What do you think you could do with that project over time? What would the goals for it be?
We want to advance these projects systematically and prudently. The next phase for us will be to complete this current follow up sampling and mapping program that we are in the midst of. The results of that should be public within 4 – 6 weeks. From there, we will be in a position to evaluate that data and determine whether or not we are seeing the kinds of mineralization we need to see to follow up on. The follow up programs for those projects would then likely be trenching and, perhaps more importantly, IP (induced polarization) surveys. The goal with IP is what we see from our neighbours at GoldQuest Mining Corp, as well as other projects and companies such as Unigold. IP survey work seems to be the most useful and successful tool for delineating drill targets. Our goal would be to get this to a stage where we can run IP over the prospective areas on our ground and if we get the results that we expect to see there, then that would obviously be a green light for proposing a drill program over the summer. Our goal here is incrementally and systematically advanced the projects to a point where they are drill ready and I think we will be at that stage by end of summer.
You have recently acquired a new acquisition in Mexico. Can you expand on this please?
We certainly want to remain much focused on our assets in the Dominican Republic and certainly don’t want to be perceived to be distracted by acquiring something in Mexico. I think in our business, in the high risk nature of our business, it’s incumbent upon us as a company to protect our shareholder value by ensuring that we have a plan B, or a second asset, in the event that our focused work in the Dominican doesn’t prove the kind of results we hoped for. For us to go out and acquire something in another good jurisdiction, where we feel that we are in a well endowed region where significant numbers of discoveries have been made, successful mining operations are ongoing at relatively low costs in the area, access is good and this is a project that has seen prior work. It is much more advanced than the projects that we have in the Dominican Republic. The Dominican assets are very early stage and advancing nicely, however, the project in Sonora, Mexico, the Cecilia Gold-Silver Project, has seen prior work by prior operators. It has been drilled with a highlight hole, which reported and intersection of 180 metres grading 1.2 g/t gold and 20 g/t silver from surface. This is a project that has some real merit. What we really like about this asset is outside of that known area, where all the work has been focused, there’s a substantial amount of ground that has seen very little or virtually no exploration. There’s a two stage approach as we move forward on the Cecilia project. One will be to validate, and then substantiate, the kinds of mineralization that has been reported by prior operators. Step two will be to look beyond those known areas and look to do exploration work in unexplored areas of the project where we think there might be potential to identify something much bigger.
What are the key challenges that you face in your business?
In the market that we are in now, one of the biggest challenges for publicly listed companies, relate to the market, relate to access to capital. I think what we are seeing right now in our space is companies are becoming more and more desperate for access to capital to allow them to continue to advance their projects. If capital dries up, I think it is going to become a process of which companies have the best potential to continue to move forward and have assets that warrant injections of capital in these difficult times. I think for us the biggest challenge is to mind the treasury, be prudent with our expenditures and make sure we are putting ourselves in a position where any money that we put out has some potential return on investment. We are really trying to streamline our efforts and make sure the majority of our work and our money goes into the ground. I think that’s what a lot of companies in our industry really need to focus on. It’s important that we are mindful of the treasury, but we are not by any means going into hibernation. I think there are a lot of companies today that are electing to sit tight and wait it out until the market comes back. From our perspective, for the best interest of our shareholders, our mandate is continue to advance projects and move things forward, to generate news. Hopefully at some point over the next 12 to 24 months, we see a return in any markets and those companies who have been doing work and have been advancing their assets, I’d like to think will be the ones who are rewarded.
Who are the key players on your management team?
https://www.precipitategold.com/s/management.asp
Our Chairman, Mr. Adrian Fleming is a geologist with 35 years diversified experience including exploration, project development and operations of mining projects. He has played significant roles in discoveries at Porgera, PNG; Big Bell, Australia; Gross Rosebel, Suriname; and Hope Bay, Nunavut. He was CEO of Underworld Resources (White Gold discovery in the Yukon), which was acquired by Kinross Gold.
Mr. Freeman, Director, is an entrepreneur and financier who has been instrumental in financing, marketing and shareholder relations' capacities with several junior exploration companies. He has over 20 years of experience in the industry, including a number of years in the brokerage industry. He was President and CEO of Pediment Gold Corp. until its merger with Argonaut Gold Inc. in January 2011. He is currently President and CEO of Indico Resources Ltd. and Ethos Capital Corp.
Mr. Quinton Hennigh, Director, is a geologist who, as President of Evolving Gold Corp, was responsible for acquiring that company's gold projects in Wyoming, Nevada and Nunavut. He is also a Director and chief consultant to Gold Canyon Resources Inc., is CEO of Novo Resources and is also a Director of Prosperity Goldfields Corp.
Mr. Michael Moore, our VP of Exploration, has over 23 years of field and management experience including work on gold systems in Greenland, Cuba, Ghana, USA, Yukon and BC.
I have 20 years of experience in the mineral exploration and mining investment industry. I bring a wealth of contacts throughout the investment community including institutional investors, retail brokers, investment bankers, mining analysts and private investors. During my career, I have been involved in numerous equity financings, ranging from IPOs to private placements and syndicated brokered financings. I was Director of two public companies, namely Welcome Opportunities Ltd. (which was bought out by Endeavour Mining Capital in 2002) and Aquiline Resources Ltd. (which was bought out by Pan American Silver in 2009). In 2005, I was involved in the formation of Silver Quest Resources Ltd., which was bought out in 2012 by New Gold Inc. Most recently, I was VP Corporate Communications at Geologix Explorations Inc.
What do you hope to achieve in 2013?
What we would like to do near term, is advance both of our projects to a drill stage. The Dominican Republic assets, most likely Juan de Herrera and Hato Nuevo if we can advance those projects to a point where we can have 3, 5 or 10 drill targets, I think that would be a goal to solidifying our involvement and continue to do business on those projects and in that country. I think with our Mexican asset, drill stage by the end of the year would be a very achievable mandate in fact, perhaps by the summer. Bigger picture, longer term, we would obviously like to do is increase shareholder value and see our share price start to move. At the end of the day, we would like to do is advance these projects and our company to a stage where we start to move out of the single digit, the 6, 7, 8, 10 million dollar market cap realm and into a higher echelon whereby we can start to attract the institutional investors, both Canadian and International. That really feeds into my strength in terms of my contacts and my relationships in the industry. If we can get this company to a point where it’s starting to get some traction with the stage of projects that can start to be attractive to institutional investors, I think we have a great combo to get in front of that audience and start to take the company to the next level of institutional involvement.
Why should investors be thinking of investing in Precipitate Gold Corp.?
There are a couple of key factors, one of which is that we are a new company. In the last couple of years markets have been very challenging, and companies that have been around for a number of years have had to unfortunately issue paper, and dilute their equity, at discounted prices. A lot of companies are finding themselves with 80, 100 or 180 million shares out and still trading at quite depressed prices. In the case of Precipitate because we are new we only have 25 million shares out. This allows us some flexibility to, if necessary, issue some stock in raising capital in a manner that doesn’t over dilute the existing shareholders. We have a fantastic team who have shown an ability to navigate companies through difficult markets with successful end point or exit strategy for investors. 2010/2011 were tough markets and some of the principals at Precipitate have navigated companies to success in those difficult markets. We have two assets in the Dominican Republic and in Mexico, that are highly perspective and fantastic potential to be bona fide discoveries.
Disclosure: Precipitate Gold is a Stockhouse client.