Chibougamau Independent Mines Inc (CVE:CBG) (OTCMKTS:CMAUF) CEO Jack Stoch is building a world class gold mining operation in the Chibougamau (pronounced che-BOO-ga-MOO) gold camp in Quebec, one of Canada’s most prolific gold belts.
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Transcript:
James West: Jack, thanks for joining us today.
Jack Stoch: Pleasure.
James West: Jack, let’s talk about Chibougamau Independent Mines. What is the value proposition for investors?
Jack Stoch: Well, the value proposition is that Chibougamau Independent Mines owns half of the Chibougamau mining camp, which is one of the major mining camps in Quebec. It’s a copper/gold camp which, interestingly enough, was explored for copper; most of the gold ignored, just because in the old days, nobody cared at $35 or $60 gold. So there’s a huge potential. The assets include five former copper/gold mines, the down-dip of three of the largest copper/gold deposits in the camp, two unmined deposits, one of which is a gold/silver/zinc deposit and one of which is a copper/gold deposit; an unmined quarter-billion-tonne iron/titanium/vanadium deposit; and a whole bunch of drill-ready copper/gold zones that just basically where there’s known mineralization from historical drilling that we’ve done deep penetration geophysics on and indicates potential at depth along strike that we want to drill.
James West: Okay. Now is this a project generator model, or are you actually advancing these projects yourself?
Jack Stoch: We’re advancing these projects ourselves at this point in time, although we have interest in a number of the projects and we’re actually currently negotiating a deal with another company where they would come in and do a major drill program, carry the project forward, and we would end up with cash, with being a major shareholder in that company, plus have a long term royalty on the results of that work.
James West: Right, interesting. Okay, so what is your priority in terms of the cash that you’re going to have to put into all of these projects, and how much cash do you have, and how much are you going to need to raise?
Jack Stoch: Well, recently we actually raised $1 million, and in the short term, we don’t see the need to raise any more. The company has no debt. We own our properties, we don’t have any payments to do on any of it except for the standard government taxes. We have excess credits, because we’ve done a lot of either drilling or geophysics on the property. So basically, the point that we’re at right now is, we’ve got a couple of geologists reviewing where we had left off previously, and basically it’s going to be drilling, drilling, and maybe some more drilling.
James West: Okay: Drilling, drilling, and drilling! That’s what drives value, I guess, into the shares of companies like that. Now, do you see yourself focusing more on the gold-dominant targets in the current gold price environment, or are you advancing the copper-heavy deposits alongside those with an equal priority, based on the fact that copper’s got a lot of room to run?
Jack Stoch: You know what? I think I mentioned previously in discussions with you that we’re long-term. I don’t want to fall in short term love with something. What I look at is, copper prices will go up, gold prices will go up, I mean, they’re down this particular day, but the long term. You’ve got to look at the long term.
And in this particular mining camp, the gold is very often associated, often all the time associated, with the copper mineralization. So you’re going for both of them at the same time, except on what’s called our Berrigan property, where we have widespread gold mineralization associated with zinc. It’s a bit of an oddball, but we’re getting very, very wide, 150-foot wide intersections of low-grade gold mineralization, a gram or better. And included within those zones we have very, very high-grade intersections, up to 49 grams in narrow widths or wider widths, you know, 13 metres at 2.8 grams, 12.5 metres of 5 grams, 10 metres of 2.96 grams, 11.2 metres of 2.54, but also with zinc. You know, like 10.39 percent zinc, 10.05, 10.82, 13.09.
The projects require a good geological study and then basically, surface sampling, drilling, mapping, and that kind of thing. The bulk of the money goes towards drilling.
James West: Okay. So among the portfolio of projects, which is your closest to actually going into production, and when will that happen?
Jack Stoch: I don’t think I would want to answer that just because it’s purely speculative at this point. If you would want to ask me, or I’ll just interpret that as a question of ‘where do you want to focus your efforts,’ and we would like to focus our efforts initially on what’s called the Berrigan, which has the zinc and the widespread gold, we’d like to see, there’s an added into the hill, there’s bulk, there’s massive sulphides, but there’s also this wide halo of gold mineralization, which we want to see if that can be an open pit project. And we want to follow up on our work that we did previously, called the Bateman-Jaculet #3 zone, where we had intersections of up to 11.5 metres of 5.2 per cent copper, 50 gram silver and a gram gold. Lots of other intersections in the series of drill holes which need follow-up. We followed that mineralization up to where we think is sub-outcrop, and when we stopped work on that project previously, we had identified what we think is the surface, the area of the surface expression of that zone, and we had the permits, actually, to go in and do the stripping. So we want to go back in to that and see if the thing sub-outcrops, and be prepared to do the surface sampling, mapping, and all the rest that goes with that, and then the detailed drilling.
James West: Okay, great.
Jack Stoch: We’ve also, by the way, we were able to double the length. There’s a historical resource on that property with a shaft and two levels, and we were able to actually double the strike length of the known mineralization, so we have to re-compile all that data also, upgrade the historical resource, and go in and do the drilling on that.
James West: Okay. Let’s talk a bit about the share structure of the company. How many shares out, how much was capital raised at, what’s out there in terms of warrants and options?
Jack Stoch: The number of shares on the company is about 37 million shares; the stock is trading at about $0.10. If I’m correct, there’s about 8 million warrants out on the company. Management has about 11.5 per cent of the stock. We have good support; the company has no debt at all, we own the property so we’re not paying option payments to anybody. So the company is neat, trim, and ready to go.
James West: Right. What is the mining code and regulatory permit regime like in Quebec?
Jack Stoch: It really depends, case by case. Compared to the rest of Canada, it’s one of the best places to work. Is it easy? No, it’s not easy anywhere in the world right now for mining companies. But one of the advantages this particular area that we have, not only do we own half of the mining camp and all these former producers with lots of known mineralization, good gold, good copper and all that, this is all within the boundaries of what’s called the Plan Nord, which is the priority of the Quebec government for expenditures on exploration to create jobs, employment, to find mines, put things into production, and they’re tremendously supportive in this area that they call the Plan Nord, which goes from just south of us, say just starting the 52nd parallel, which passes just north of Lebel Sur Quevillion going northward. So this entire package falls within that.
Any project that, if you have the slightest chance of getting towards production, the government is going to be there behind you, helping you. You can see that with their road construction and their investments in various companies, whether it’s Nemaska for lithium or whether it’s Stornoway for the diamonds, or Eleonore, I mean, they buy shares, they build roads, they help with power lines, I mean, they’re proactive in expansion of the mining industry in the north.
James West: So that sounds like relative to other jurisdictions around the world, Quebec would be at the top of the list for miners?
Jack Stoch: It’s definitely one of the top places, yes. But I don’t say it’s easy, but it’s one of the top places, yes.
James West: Right. Okay, Jack. That’s a great introduction to the company. We’re going to come back to you in a quarter’s time or so and see how you’re making out. Thank you very much for your time today.
Jack Stoch: Cool, thank you. Take care.
James West is an investor and the author of the Midas Letter, an investing research report focused on Canadian markets. The views expressed on this podcast — edited for clarity, brevity and compliance with securities laws — are his own and are presented for general informational purposes only. They should not be construed as advice to invest in any securities mentioned.
James West and/or associated funds do not own shares in any securities mentioned in this article. For the full Midas Letter disclosure policy, click here. Postmedia and Midas Letter have a revenue sharing arrangement.