Royal Nickel Corp. RNKLF

$RNX: Very good interview Mines and Money 2018,my transcript

[pierreg]

Very good interview between Swiss Resource Capital AG and Mark Selby December 7th 2018 that I transcribed:

Swiss Resource Capital AG: Welcome ladies and gentlemen Mines and Money 2018 here in London and now we have a very special company here which was in the last weeks and months a lot in the media. I call them the marketing company of course it's RNC Minerals and the President and CEO wants to talk to us, Mark Selby welcome.

Mark Selby: Glad to talk to you today.

Swiss Resource Capital AG: Yeah fantastic to see you again. Four years ago, we met in Zurich. Coincidence which was already very interesting.

Mark Selby:  Yeah

Swiss Resource Capital AG: Now maybe you give a short overview on your company and let's dive fully into it.

Mark Selby:  Yeah back at that time we were a single project company with the Dumont nickel cobalt project. Early 2016 we realized was still going to be a few years until the nickel market was ready for a large-scale nickel project. We picked up two assets at that time, a company that had a 30% interest in the Reed Copper Mine which was a producing copper asset and then the Beta Hunt Mine which was a 45 year old nickel mine with a massive amount of gold potential sitting directly underneath it. So, Reed was a home run out of the gate. It took us a while to get Beta Hunt to where it was but you know as everyone in the media has seen, you know we made the Father's Day Vein discovery in September which transformed the company.

Swiss Resource Capital AG: Yeah fantastic and what really paid your bills is stuff like that ladies and gentlemen. I really have to hold that up because this little lovely rock is $25,000 worth and it's full of gold. It's really heavy to be honest. So, what happened? I mean that's why I said you are the marketing company, crazy.

Mark Selby:  Yeah so, the mine as in its 45-year history as they were mining the nickel lenses. Around those nickel lenses they would find 500,600, 700 ounces of specimen gold like this and so, we understood the mechanism as to how that got there what was really exciting for us is we found a layer about 150 meters down that's continuous across the entire property that creates the same environment for the goal to drop out and so, in September we're driving along, made a right turn three cuts later walked into 25,000 ounces of gold, out of the space of your living room. Literally I mean it took out and of that most of that goal came from about one and a half tons of gold that created 40 percent or 400,000 grams per ton.

Swiss Resource Capital AG: So, what have you done with the money?

Mark Selby:  Yeah so, we had a lot of debt, that's all gone. We started November with 18 million dollars in the bank and you know the key for us was we bought the asset for the gold exploration potential and we could just never raise the capital to do that drilling. Now we've got three drill rigs on site and what impressed us about the property, when we picked it up it’s got from the nickel drilling, they basically highlighted four kilometers of strike length of four different, what we believe is four different shear zones and so, and they just they just basically did the first 20 meters. So, they gave us a roadmap as to where all those shears are and we're sitting in a structure where these can potentially go for one to two kilometers. So, we always believed we're building Western Australia's largest underground gold mine and so, we're now well on that path.

Swiss Resource Capital AG: Super and of course you have backed through income because you keep on finding those lovely little rocks but you have some big ones at the both down there which is really impressive yeah, you even have security.

Mark Selby:  Yes, we've got over four million dollars worth of gold in the booths. We're able to get the export permit from the Western Australian government. So, you know we're taking them out so investors and collectors get a chance to see these beautiful specimens.

Swiss Resource Capital AG: Super fantastic, but I'm asking myself as an investor from an investor perspective, I would say beautiful what you have, beautiful you paid off your debt, super that you have the nuggets. How sustainable is that, because it's great to find this but it's not a guarantee let's say in two years that you still find a lot of nuggets. How do you work that? How do you treat that?

Mark Selby: That's a great question you know and number one again, we bought this mine because we believed there was these great big shear zones again four kilometres. You can fit two mines into that kind of a strike length that again can go for a kilometre deep. We have a five kilometer ramp system that's already there.

Swiss Resource Capital AG: :  Fantastic

Mark Selby: It was built for the nickel and is sitting directly above the gold. So, we have a half a billion dollars worth of infrastructure already in place. So, you know as we drill this resource out, you know what we saw when we were doing our drilling, our resources is about 3 grams but as we were drilling, we saw lots of 4 gram 5 gram intersections and obviously, this sediment layer that we found siphons off a lot of gold. So, what we're really excited about is you know what's the grade of the material underneath those shears? Just to get to get this much gold into one little rock you either need fluids with a lot of gold, a lot of fluids or both. We think maybe we have both and so the drilling is going to find that out. So, we think again this can be very large mine and again in terms of the potential of this asset, these two rocks are three kilometers apart on two different shears. So, this gives us a massive amount of real estate, but as we're drilling out the main resource we can go find more of this high-grade gold in the meantime.

Swiss Resource Capital AG: So, even that is 3 kilometres away it shows because the gold did not jump there?

Mark Selby: No exactly, it comes from underneath.

Swiss Resource Capital AG: :  So, that's a good sign that probably in between you find some more?

Mark Selby: Yeah

Swiss Resource Capital AG: So, in terms of economics, do you have a resource now already drilled first thing and second thing, is like are you able let's say in the future, to do let's say a normal sustainable production? You can really calculate.  You can say okay I have X amount of resources or reserves.  I know I can produce the next ten years out of that and I keep probably hopefully finding nuggets on the side which is a nice top and you pay out of that a dividend to the shareholders?

Mark Selby: Exactly as a big shareholder myself I’d be very glad to get some dividends in the future. Yeah, we have a 400,000 ounce resource right now but that's really within the first, most of that it's in the first 25 meters the first scratch. It’s this new set of drilling that we're going to have a resource update in the second quarter next year and as I said you know we saw lots of 4, 5 and 6 grams and the drilling we've done before and we want to get underneath that sediment layer to see what that base grades going to look like. So, we're pretty hopeful that is going to be a pretty decent grade and again have what we think will be a very large hundred thousand ounce plus gold operation in the future.

Swiss Resource Capital AG: Fantastic, well that sounds great. What is the time plan for that just roughly hypothetically because it's a forward-looking statement? We don't want to nail you on that but maybe give us an idea if we talk about two years, three years, five years from here.

Mark Selby: Right okay, so we've got three drills on site right now. We'll do the resource update Q2. Will look to re ramp up the lower grade production in the second half of next year and again, given the scale of the asset we know the ramp can do 3,000 tonnes a day. We've done that and so, with that kind of a volume and X we expect a grade to go up materially. We've got the potential for a mine to be 150,000 to 200,000 ounces and that's just on the first 2 kilometers. Then we have a whole series of other discoveries where we've got another two kilometers which can even add more production longer-term, that's the three plus years. So again, I think for investors now the stocks made a nice run but again if you step back and say okay, how many high-grade gold discoveries have there been made in very low risk jurisdictions like Western Australia and not only in a low risk jurisdiction but basically, sitting adjacent to 5 kilometres of mine infrastructure? So, as we find this resource, we're going to be able to bring it in production relatively quickly.

Swiss Resource Capital AG: So, time wise do we talk about two, three years? Is that foreseeable?

Mark Selby: We will look to re-ramp the mine the low-grade part of the mine back up in in the second half of this year and then you know two three years again we will have different phases as we just build, we believe will be bigger and bigger.

Swiss Resource Capital AG: Different production scenarios?

Mark Selby: Yeah

Swiss Resource Capital AG: How much money would be required approximately? Could you say for example, okay if we keep on finding those beautiful nuggets maybe we can pay the most by ourselves?

Mark Selby: I mean we've got the money for this first phase of drilling that we want to do. As we go forward it really is going to depend on how much of this we find. I'd love to say it's 5000 ounces a month but to be honest, I don't know whether there will be 5000 ounces next week, next month or three months from now. So, but we know as we found this in the beginning of September, before we even had a model that we knew what we were doing with it, we still found 2500 ounces of specimen gold.

Swiss Resource Capital AG: Perfect, maybe a stupid question from my side but, just come to my mind how do you control that all the nuggets find the way to your treasury and not to the pocket of let's say X Y Z?

Mark Selby: So, the miners don't show up in Lamborghinis and Bentley's in a parking? No, I mean again, these are in an isolated part of the mine and we keep access to that part of the mine to very restricted few people with gates and cameras. So, we have full video of who's going in there and what's going on.

Swiss Resource Capital AG: : So, you’re not driving a Ferrari?

Mark Selby: No

Swiss Resource Capital AG: : I’m joking. Honestly those are the questions we are facing from our viewers because this is, I would say something obvious.

Mark Selby: $25,000 it's what fits in your pocket.

Swiss Resource Capital AG: That sounds like a real fantastic game plan I must say and I really look forward to more news from your side and I would say keep it keep it going, keep it drilling. When can we await the next news?

Mark Selby: I think we'll start to get drill results out by the end of the year and then, we'll have a steady flow of drill results through the first quarter next year.

Swiss Resource Capital AG: After Christmas?

Mark Selby: Yeah, and hopefully have a few more nuggets, yeah exactly.

Swiss Resource Capital AG: It was really interesting and assess it, keep it going.

Mark Selby: Thank you, talk again soon, take care.

Swiss Resource Capital AG: Yeah ladies and gentlemen it was Mark Selby from RNC Minerals, the president and CEO and those beautiful rocks, really this is outstanding I've honestly never seen that large nuggets and also, at his booth before and I mean they paid off their debt, this is something I really like as an investor of course because it takes out the risk for investors but also takes out the risk for the company to be pressurized that's a really good thing. So, they use the money very wisely so far. Three drill rigs are turning, a lot of news flow is coming up in the first quarter so I would say check out the company. Stay tuned for news and thanks for watching us and bye, bye from London.

https://www.youtube.com/watch?v=qb7YpxdG42o