Royal Nickel Corp. RNKLF

Video & my transcript of CRUX after sit down with Paul Huet

[pierreg]

Insightful comments about RNC Minerals by Matthew Gordon of CRUX investor after a sit down with Paul Huet. Video & my transcript:

Published on Youtube September 18th 2019
https://www.youtube.com/watch?time_continue=9&v=jwoQE-F3ZCE

My transcript:

Matthew Gorden: « Hello everyone I'm back from my trip to Canada. I was in Toronto last week. Had a great time. Met a bunch of companies. Want to talk today about one of them, which is RNC Minerals. I took the opportunity to meet with Paul Huet. He's the new CEO there.

It's a company that we've been interested in previously and they kind of stepped away a bit, because there's some things going on which I didn't quite understand. But I am intrigued by Paul's background, his story and some of the things I'm hearing. So, took the opportunity. Met with him last week. What do I make of him? Seems genuine guy. Seems really passionate about what they're doing there. He's got a good track record with Klondike. I quite like that back story and he's a gold guy and they're focusing on gold. So, he's been through a review he tells me and quickly assess what they had, didn't have. I think that's interesting in itself and make some changes. Say in the last 60 days he's added to the management team Graeme Sloan’s obviously there and he's brought on a couple of his guys Harvey and Wynn to look at Beta Hunt and Higginsville mining operations respectively. So, I like the fact that there's this real focus on gold, that's not to say that the Dumont nickel story isn't important, it is but we'll talk about that in a bit.

Paul himself I think he's had a bit of a shaky start. I think he kind of got caught out with the investor call with the guys that fundraise. He could have handled that a lot better. But as I'll talk about in a minute, I'll tell you why I don't think that matters. I mean please tell me if you think it does and why using your comments.

I want to talk about the fact that they're in production. They've got the two producing assets. They have put it through their own mill. The Higginsville acquisition was quite contentious to say the least. The chat rooms and forums were going berserk. But I think that's now starting to look quite cheap. So, averaging eight thousand ounces per month for last two months looks like they'll get there. That sort of average moving forward. So, that's kind of intriguing. Also, some talk about them spending some money to work out if they can increase the throughput of Higginsville plant. That will be interesting to see. Is that going to be 25% more, 50% more, 100% percent more and there's going to be a cost of that? I want to know how they're going to finance that because no one wants any more dilution. But maybe that might be an acceptable  reason for doing so. Paul says they're looking forward to positioning their first maiden 2P resource. I'm not quite sure of the timing on that one. But I think that would be good for the company.

We'll say we've been talking about cost-cutting measures. Now that pretty much comes hand-in-hand with the team they're put in place in Australia with Graeme Sloan. I think that's important that they look at the processes in place at the moment. Look at how they're spending the money. Where they're focusing their monies. Again, we'd love to see some guidance as to how that's going.

We talked about the fund raise. These 18 million bucks. My view and some of you who were in contact with me at the time, asking me for my opinion will know that I said I thought the company needed that to happen. It needs it to happen because it's going to give it cash to allow it to move forward at pace. Otherwise, you're going to get the sedentary type stagnation or lack of growth, which given what's happening with gold at the moment. I think is really, really important. So, being able to wrap things up quickly. I think that's good for shareholders. The warrant component again, I can see why that might have been necessary and I think one or two of you we're in discussion with me and disagreed with me on that. I could see that happening. In fact, it was a half warrant, at the answer I was only half right. But that's got to be in place. It's allowing them I think to attract the right sorts of institutional investors. Otherwise, you're going to get people shorting the stock and there have been enough of that kind of fun and games going on from what I've seen over the past few months. So, we don't want that and let's talk about cost-cutting.

They need to renegotiate some of these royalties that they've inherited along with the project they bought. They're not good. I think that they can do better and they need to get in there and do something about it. Also, at the same time let's talk about the current vendor contracts they may have a place? Get in there and look at those too. They may not be fit for purpose anymore and finally, G&A always G&A. Companies of this size need to look at their overheads. They’ve got offices in Toronto and Australia. Obviously with Dumont as well going on. There's a lot of cost going on. Can they do more? Can they do it for a less? Big questions, don't know the answers to that. Very keen again to see the guidance for that in the next coming months and let's talk about the ASX listing. Do I think it's a good idea? Do you think it's a good idea? The people I've been speaking to in Australia are unable to give me an example of where it's worth taking a TSX company and also co-listing it on the ASX, especially with gold. I could be wrong but let's see how that plays out.

Company again, it's got some big decisions to make around that and of course the Dumont. I keep hearing this phrase and you get Dumont for free. I don't know what that means. I don't like it. What I want to hear from the company is what are they going to do to monetize this for shareholders? It's got a NAV of nearly a billion bucks. It's going to take a lot of money to get this thing into production. It's a huge asset. It's got real value for shareholders.  So, let's hear from the company. What they're going to do? What do you think they should do? So those are my views. You don't need to agree with them or you can agree with them. But let me know in the comments section below.

Love to hear from you and I will get back to every single person who comes back to me. Obviously, this will be on Twitter and I guess the CEO guys will also have their views. I look forward to hearing from you all. Until next time. »