Apex Resources Inc. (TSX: V.APX, OTCQB: SLMLF, Forum) is a gold exploration and development company pursuing a project generator business model. Management focuses its acquisitions on established mining camps, looking for early-stage, under-developed land packages which it can advance. The Company’s experienced management team has a track record of success in developing these properties and then arranging joint ventures or straight sales of these assets.
Apex is very eager to begin development on a trio of recent acquisitions in British Columbia’s “Golden Triangle”, its Eldorado, Cloud, and Wild land packages. In addition to a number of current and past-producing mines, the region hosts several, very large gold deposits presently under development.
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Seabridge Gold’s KSM Project is one of the largest undeveloped gold projects in the world, with a PFS identifying a resource of 38.8 million ounces of gold. Pretium Resources is close to bringing its Valley of the Kings gold mine into production. Proven and probable reserves for the project already total 8.1 million ounces of gold.
APX has a tight share count, with less than 14 million shares issued and outstanding. Proceeds from the sale of two of its properties (Jersey-Emerald and Kena) are expected to bring in over $3.5 million over the next two years, sufficient to fund a majority of the Company’s operations. Stockhouse recently had the chance to pose several questions to the President and CEO of Apex Resources, Arthur Troup, to enlighten investors on its recent activities.
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- Please introduce newer investors to Apex Resources.
Apex Resources Inc. formerly Sultan Minerals Inc. underwent a name change and 10 for 1 share consolidation in 2016 and currently has under 14 million shares outstanding. Apex has successful vended two of its properties with revenues expected to net in excess of $5.2 million in property payments over the next three years. The company is currently focused on aggressively exploring its three exciting gold properties in BC’s Golden Triangle and its silver rich Red Ridge property in the Yukon.
- The Company has a very experienced management team. Who are your main principals?
Mr. Arthur G. Troup, M.Sc., P.Eng. has been President, CEO and Director of Apex Resources Inc. since 1997. From 1981 through to 1996 Mr. Troup was President of Archean Engineering Ltd., a firm offering project management and mineral exploration services in the Americas, Southeast Asia and North Africa. During this period he was VP Exploration with the Lang Mining Group and was involved with discovery of the Hemlo Gold Mine in Ontario and the Sleeping Giant Mine in Quebec. Prior to this Mr. Troup worked for Inco, Teck-Cominco and Rio Tinto for 12 years where he was involved with several of Canada’s largest mines including Highland Valley Copper, Canada’s largest copper mine.
Mr. Ben Ainsworth, M.A. (OXON), P.Eng. BC, Director, graduated with an Honours Degree in Geology and has been active in mineral exploration for 40 years. A Senior Geologist with Placer Development Ltd. he held assignments as Chief Geochemist, Exploration Manager – Eastern Canada. During more than 20 years with that company he was involved with the discovery, in 1972, of the world class Howards Pass lead - zinc deposit, and the re-discovery of the Clea Tungsten deposit. In 2013 as CEO of Alpha Minerals he was involved with discovery of the Patterson Lake South Uranium deposit. In 1986, he formed an international mineral exploration consultancy and in 1995 formed a Canadian syndicate that discovered the first reported marine alluvial diamonds on that coast. He serves on the board of several junior mining companies, working with a wide range of commodities.
Mr. Robin Merrifield, CA (S.A.), Director has 40 years of international experience as a chartered accountant to the mining industry. He was formerly Executive Vice President and Chief Financial Officer for Uranium One Inc. Mr. Merrifield obtained his CA while working for Deloittes in Cape Town, South Africa. He has also previously worked for ten years as Financial Controller for a large nickel/copper mining complex controlled by Anglo-American Corporation, Assistant Vice President of Finance for one of Robert Friedland's companies and as Controller for Cameco Corporation.
Linda Dandy, B.Sc., P.Geo., Director, is a graduate of the University of British Columbia. Ms. Dandy has been involved in all aspects of mineral exploration and development for over 30 years. During this time, she has worked as a consultant to major mining companies, junior resource companies and the British Columbia Ministry of Mines. The majority of her career to date has consisted of precious metal exploration in the North American Cordillera, although she has international experience through a broad spectrum of deposit types. Ms. Dandy was integral in the discovery of the Gold Mountain Zone (gold porphyry deposit) on Apex's Kena Property. Another highlight includes exploration, development and mine permitting of the Yellowjacket Gold Mine in northern BC.
Mr. Marc H. K. Lee, B.Sc. joined Apex Resources Inc. as corporate communications officer in 2006 and later became Chief Financial Officer and Corporate Secretary in 2011. In 1992 Mr. Lee was a trader with Toronto Dominion Greenline Investor Services Inc. In 1993 he moved to the Bank of Montreal Investorline where he was the principal trader for Asian clients. From 1996 to 1998 he set up and managed the first TD GreenLine office in Hong Kong and in 1998 he became director of operations for ETRADE branded service in Asia. In 2000 he became vice-president of financial services for Asia Commerce and in 2001 was appointed executive director head of investor services for the Bank of China international online trading.
- Before discussing Apex’s new projects, let’s review a couple of recent successes. The Company has optioned its Jersey-Emerald tungsten-zinc property to Margaux Resources Ltd. What were the terms of this deal?
In 2013, the Company entered into an option agreement (later amended) with Margaux Resources Ltd. to option its 100% interest in the Jersey and Emerald Properties for total proceeds of $4,010,000. Under the amended agreement Apex has received payments totaling $1,060,000 to February 10, 2017. To earn its 100% interest in the Project, Margaux is presently making payments of $15,000 per month to Apex. Commencing April 1, 2017 Margaux will be making payments of $50,000 per month for a period of 12 months and $100,000 per month commencing April 1, 2018 until a total of $4,010,000 has been paid.
Apex will retain a 1.5% net smelter returns royalty (“NSR”) on the property. For a period of 60 days following the earlier of (a) the commencement of commercial production on the Property or (b) the completion of a feasibility study on the Property, Margaux may purchase 50% of the NSR (being a 0.75% net smelter returns royalty) from Apex for a payment to Apex of $5.0 million.
- More recently, Apex has optioned its Kena Gold Property to an Alberta company. What will the Company receive as proceeds of the sale?
In September 2016 Apex entered into an option agreement with 1994854 Alberta Ltd. ("Acquireco ") whereby Acquireco has an option to earn an 80% interest in Apex's Kena and Daylight Gold-Copper Properties in British Columbia for total cash option payments of $1,250,000 over thirty-six months. Acquireco must also make share payments totaling 1,500,000 shares over thirty-six months and complete $3,000,000 in project related exploration expenditures over four years.
After Acquireco has earned its 80% interest in the Project, Acquireco has a second option to earn and acquire up to an additional 20% undivided interest in the Project by making a $2 million cash payment to Apex and granting a 1% net smelter returns royalty (the "NSR Royalty") on the Property to Apex.
- In August 2016; APX acquired three large land packages in B.C.’s Golden Triangle. Please discuss the highlights of the 1617-hectare Eldorado Property.
The Eldorado Property is located 10 km northeast of the historic Granduc Mine with 15.5 million tonnes of historic production grading 1.22% copper, 0.13 g/t gold and 7.97 g/t silver. An airborne electromagnetic (EM) conductor associated with a weak magnetic anomaly is the principal target on this property. This EM target is comparable in size and magnitude to a similar conductor seen over the nearby Granduc ore body. The target requires ground follow-up in preparation for a proposed diamond drill testing program.
- The Cloud Property is another large land package (1517 hectares). What is the prospective potential of this project?
The Cloud Property is located 8.0 kilometres northwest of the historic Granduc Mine. On the Cloud Property, high level government magnetics show a strong magnetic trend similar in size and magnitude to that seen at the Granduc Mine. Apex plans to carry out a magnetics and electromagnetics airborne geophysical survey to determine if the target warrants diamond drill testing.
- The Wild Property is the largest of the three land packages (4726 hectares). What interests the Company most about this property?
The Wild property is located 15 km south of the historic Snip Gold Mine and 7 km south of the former high grade Johnny Mountain Gold Mine. Two gold target areas on the Wild Property are defined by historic stream sediment and rock sampling programs and a historic aero-magnetic survey. (Historic rock float samples are reported to carry up to 4.0 g/t gold.) A follow-up prospecting and sampling program is planned in order to assess and better define the targets for proposed LiDar and follow-up airborne geophysical survey to define targets for drill testing.
- What preliminary work needs to be completed before APX can begin drilling on these three highly prospective properties?
Follow up programs including mapping and sampling of existing targets, geochemical and geophysical surveys to define additional targets and government permitting must be completed to prepare the properties for drill testing.
- The Company also recently acquired the Red Ridge silver-gold property, and has done some preliminary sampling. What has Apex already discovered here?
The Red Ridge property is located in the southwestern Yukon Territory approximately 40 kilometers south of Whitehorse. The road accessible property covers part of a gossanous ridge known as Red Ridge just 23 kilometers from the former high-grade Mt. Skukum, epithermal gold mine. Previous work has reported numerous high grade silver and gold showings on the Red Ridge property within an area measuring 2.0 km in length by 500 metres in width.
In October 2016 Apex completed an initial rock sampling program on its Red Ridge Property. The sample results confirmed the historic reports. Highlights of the sampling program included 16,271 g/t silver and 5.24% copper from a grab sample in the East Zone and 23.4 g/t gold from a 20 cm chip sample in the Saddle Zone.
- Is APX currently targeting any other prospective properties?
Apex is in the business of exploring and developing mineral properties and is constantly reviewing property submittals. The company is presently in advanced discussions regarding another property of merit but there is no assurance that the discussions will be successful.
- What are Apex’s current cash holdings, along with other capital assets?
Apex Resources has cash and investment holdings in excess of $250,000. Apex Resources is expected to receive in excess of $3.5 million in cash (from proceeds of property sales and Joint Venture agreements) over the next three years as well as over 1 million shares of a publicly traded company. The Company plans on arranging a financing in 2017 for an expanded exploration program on its four new properties in B.C. and the Yukon.
FULL DISCLOSURE: Apex Resources Inc. is a paid client of Stockhouse Publishing.