What follows is a Q&A interview with Stephen Wetherup, B.Sc., P.Geo. Steve is the qualified person for and consultant to Tiex Inc. (TSX: V.TIX, Stock Forum).
Rick: Can you first give us a general overview of Tiex’s properties?
Steve: The properties are located in the central part of British Columbia, Canada in what’s known as the Cariboo Region. Tiex’s property package in the area was 138,000 hectares, we’ve cut it back a fair bit just to focus on the areas that we had enough information on, areas we thought were prospective for discoveries – our costs for the land had just doubled, by dropping pieces we’re able to put more dollars into the ground instead of scrambling to raise money just to cover land costs. It’s now down to 75,000 hectares with 22,000 hectares optioned to Newmont.
Tiex now controls three non-contiguous blocks - Gold Creek, Cedar/Louis and the Horsefly Property.
Rick: More money into the ground on properties you really like and think have a real shot at something rather than some stuff that’s maybe just been put there to make it contiguous.
Steve: That’s right, as far as we know there may be something out there, you can never say there is nothing out there, but we already had so many high quality targets both for copper/gold porphyries and for sediment hosted gold - I broke it down to being nine really great projects that we could spend our money on. That’s a lot of 100% owned targets to start with and there’s still very high discovery potential left on our properties. I thought why are we keeping all this extra ground that really has nothing to do with them? This way we can focus on what we’ve got, develop them, bring them along a lot faster and get some news out of them
Rick: It seems that for the whole time I’ve been associated with Tiex, I’ve heard nothing but “there’s nothing over there, you are in the wrong area.” What’s behind this?
Steve: People have said, in regards to Tiex’s properties, “There is no subduction zone or the subduction was too far west. When you’re in the sedimentary package you’re too far away from those volcanic cores.” But we’ve got intrusions, we’ve got volcanic rocks out there. The comment always was that you need high energy volcanic rocks because the high energy rocks are the big chunky boulders of volcanic material within the lava flows and they show you that you’re on a very steep slope , hence you’re on the volcano itself right? Well right at Viewland (part of the Horsefly property) I was finding massive boulders of volcanic fragments within volcanic rock. So there were active volcano centers to the east.
The porphyries that have been found to date are always associated with high amounts of magnetite, so they are always highly magnetic. They’ve been found because people have looked at the regional information and they’ve gone to the magnetic highs. The mapping by the BC government didn’t extend really outside of that certain area, certainly not significantly unto TIX’s ground.
Rick: And they get surprised when they drill and hit something in a low, which has happened.
Steve: Exactly.
Rick: Mt Milligan isn’t a conventional Quesnel Trough Copper/gold porphyry target is it?
Steve: No. There’s magnetite associated with that deposit but most of the mag high has nothing to do with the deposit. And the deposit itself is in an area of slightly lower magnetism. The mag high is mainly around the rim. If you go after magnetic highs your drilling magnetite and that isn’t what you’re looking for so, it’s not always diagnostic of the mineralization you want to find.
Rick: Is Tiex going to open up a few eyes?
Steve: I think we are, we’ve got everything we need out there. We’ve got magnetic highs with resistive highs that are showing there are intrusions out there. We’re east of the main trend, yet here we are finding intrusions in around the Viewland project and elsewhere in the sediments we’ve got. It’s an evolving idea, a theory we’re going to prove this year and into next.
Rick: Okay, let’s break down our properties a little bit, concentrate on the ones that are going to see the most work this year. But first lets jump over to the Newmont Bullion property option, can you tell us a little bit about that?
Steve: Yeah, that’s a difficult one for us to work, mainly because we don’t have a lot of information and that area is covered by a lot of glacial till.
We did some MMI and really those were some of the lowest numbers we’ve seen in the area but it’s hard to say if it’s because it was so deep - MMI is not supposed to be affected by that but I can’t image that 150 meters of till verses 2 meters of till has no affect. It’s hard to say, but they were our lowest numbers, in the 4000 – 5000 samples I had, those are some of the lowest.
Rick: So we optioned off what we considered out lowest chance property based on the numbers we had?
Steve: Basically that’s exactly it. If you’re going to have in the 100’s of meters of volcanic rock sitting on top, that’s going to seriously affect how easy it is to make a discovery and whether you’re even going to be able to mine the thing. We really had no reason to keep working in there.
Rick:Newmont Mining Corp. (NYSE: NEM, Stock Forum) seems to like the area, they’ve subsequently optioned a couple smaller properties from companies in the area.
Steve: Yes, they got the one showing from a local prospector, it was in the middle of our Bullion property, so I think a lot of what they were doing was just saying “Well look we have a pretty solid showing here that’s in the regional mag, a nice mag ring so it shows an intrusion there. We want to solidify up our property package and some of it might bleed out onto the Bullion property.” That was probably the main reason to get it from us.
Rick: Tiex optioning it to Newmont certainly makes for good press and keeps us in the game, keeps them maintaining 22,000 hectares. I think it’s a win/win.
Steve: I don’t think a junior can put a porphyry into production. I think you need to be looking for a major miner like a Gold Fields Ltd. (NYSE: GFI, Stock Forum), Newmont or a Freeport McMoran Copper and Gold Inc. (NYSE: FCX, Stock Forum) to come in early. That’s got to be our thinking, we want to get into a joint venture with a major with these things and get them involved to do all the heavy lifting later because we just don’t have the wherewithal to do it. You’re going to dilute yourself to death and news flow just slowly diminishes because you’re just doing production drilling, it’s pretty hard for juniors to get into the mining game on porphyries.
Rick: You go the route of the property dilution model and company dilution model. With these porphyries, I think it’s best to take property dilution - where you’ll take 30%, give somebody 70%, let them spend the money and you go work something else 100% owned while they work the JV.
Steve: Exactly, it doesn’t make financial sense for you the junior, but it makes financial sense for a major to back you, to not have to go out there to explore all the time. They have accountants to deal with that are sitting there saying well we need to improve our inventory, and how are we going to do that doing a hundred million dollars of exploration, you could do a 100 million dollars and not get anything. So big companies are all of a sudden answering to the bean counters who are saying “we mined this much copper we’ve got to replace it, how do we do that?”
Well how they do it is they buy another company or they buy into a project. That’s the easiest way for them to get in, they’ve got a large pool of money, we’ve got the projects, so let’s help them use their money.
It’s all to our advantage, let’s figure out where we are in the food chain and do it well.
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https://aheadoftheherd.com/Newsletter/2011/Ahead-of-the-Herd-with-Steve-Wetherup.html