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Mining Exploration in the Presence of Giants, in the Heart of the Golden Triangle

Dave Jackson Dave Jackson, Stockhouse
0 Comments| November 18, 2020

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There’s been a lot of buzz on Stockhouse about the vigorous renewal of major mining operations going on in a prolific, but underexplored, region of British Columbia. And one junior explorer is developing what they believe "has the potential to be the next major gold-copper world-class discovery in the Golden Triangle."

Metallis Resources Inc. (TSX-V.MTS, OTC: MTLFF, FSE: 0CVM, Forum) is a Vancouver-based junior resource company focused on the exploration of copper and high-grade gold at its 100%-owned Kirkham Property, located near Stewart B.C., in the historic and prolific Golden Triangle in the province’s northwest region.

In this lively and informative podcast, Stockhouse Media’s Dave Jackson was joined by Peter Oates, Manager of Corporate Communications, to talk about some of Metallis’s recent exciting news from their exploration project, the property’s location near other major discoveries in the immediate area, and the company’s future plans.


SH: Perhaps you can tell us a bit more, generally, about Metallis Resources and its focus?

PO: Absolutely. As per your intro, Metallis Resources is a junior resource company with a focus on gold and copper exploration. There is a nickel component to our story due to closeology to a nickel discovery that's been made just to the North of our border. But primarily our story is absolute, and our focus is gold and copper exploration. As you mentioned, we're listed on the TSXV under the ticker symbol MTS, for your US listeners, we're also listed on the OTCQB under ticker symbol, MTLFF, and just in case, in Europe we're listed on the Frankfurt exchange under ticker symbol, zero CVM.

Briefly, we've been around since 2013 and think we've got an incredible share structure for a company of our age. We only have 44 million shares issued and outstanding, and that is with no rollbacks over the last seven-year period. Management owns around 11% of the company with no shares being sold and no options exercised, and we take part in pretty much every round of financing - up until the last round because it was more directed towards strategic partners. Management is heavily and personally invested in the company.

That's a brief overview, but before we get too deep into the weeds, I want to make a quick statement with regards to the company and management. Our primary responsibility as a management team and a junior resource company is to manage investor risk. So in what is already a high risk investment environment, we do this by identifying possible investor pain points and getting in front of them before they become issues. These are commonly over dilution and experience of the geological team, you know, past successes and discoveries and what have you, and management investment levels and all the rest of it, just to name a few. And what I hope we get from today is your audience realizing that as a company, we take that role very seriously and have done everything we can to protect investors interests.

SH: For investors not entirely familiar with BC’s Golden Triangle, what are its key advantages and why Metallis is entirely focused on this specific region?

PO: What a great question. The Golden Triangle is probably one of those last exploration frontiers, meaning that it's in a mining friendly, geopolitically stable first world country. It’s an incredibly safe jurisdiction to work in, that’s a primary reason. A combination of remote location, low historic gold prices, poor infrastructure and high exploration costs has left the area largely untouched by exploration companies up until recent times. Even with that lack of historic work, the area is highly prospective for discoveries. Some high-level numbers, in the area of 130 million ounces of gold 800 million ounces of silver and 40 billion pounds of copper have been found up until, or discovered up until recent times. Geologically, it's just an incredibly rich area to be working in for exploration.

On top of that First Nation relationships are really good. I think that comes down to a mutual respect on how we work and manage our projects, and also transparency. And there's plenty of examples in the area of discoveries, but more importantly development and production. Also, on top of that, the collaborative approach to exploration with our peers in the area. I mean, you don't really get it in other areas. And I think it might be because of the remote and the challenging terrain. We really do lean on each other, for example we've shared costs with numerous neighbors on doing geophysical work. This year we put up our own camp and that was put up on another company's property. And so I think we really do have that collaborative approach to exploration.

And I think, the last thing being is every company realizes that most companies are “pro-success” for other companies. We understand that success brings investment and investment brings infrastructure, which in turn means any future discoveries that are made are more likely to be economic due to lower Cap-Ex because the infrastructure has been put in. All in all, that's a high-level reasoning of why we're 100% focused on the golden triangle and for an exploration company, why it's an incredible place to work.

SH: As I mentioned in the intro, Metallis Resources owns 100-percent of the Kirkham Property. What are the core benefits, pardon the pun, of this project moving forward?

Click to enlargePO: Firstly, it's a hundred percent ownership of 106 approximately square kilometers of prime real estate within an incredible minerally rich district. When I say prime real estate, I mean, it gets banded around quite a bit, but we really are in the heart of the Golden Triangle. I'd encourage the listeners to look at a map and look at Metallis and our position to major discoveries that have been made right on our doorstep. 15 kilometers to the east, you have KSM, which is the world's largest undeveloped gold deposit of 36 million ounces of gold. I mean, it's, it's huge. Eskay Creek, which when into production, was the richest gold deposit on the planet. It's currently being drilled by Skeena Resources who are doing excellent work up there. And they're looking to put that back into production over the next few years.

Also you have Red Chris and Galore Creek all within the area, and then there's plenty of others. So as an area, as real estate, it's amazing. Property specific, we have multiple commodity type and also target wise, and also multiple target types on the property. But primarily our focus is, and its enviable from other companies I’m sure, a seven and a half kilometer porphyry trend on the property smack bang in the middle that has multiple porphyry targets on it.

And just to mention that we purchased the NSR on this area, on these two claims a number of years ago. So the NSR is owned, which means that if a discovery is made and a major is interested, then we don't have that complicated third party owned NSR hanging over the economics of the project. Essentially that's the nuts and bolts of it. We have this seven and a half kilometer porphyry trend, which has shown up till now plenty of smoke. It's just the case of finding the fire.

SH: Recently, the company announced the closing of a $3.3 million dollar private placement. Can you give us some of the details on this non-brokered PP?

PO: We closed it a number of weeks ago. It's essentially broken down to approximately 1.6 million in hard dollars and the rest was flow through, we closed it fortunately before the end of the season. That allowed us to allocate flow through from this financing to this year's program, which was great. And we still have flow-through dollars left over that we can allocate for next year. From that financing and the hard dollars, we currently have around 1.8 million in hard dollars, which from a G&A point of view, will last us at least the next 12 to 18 months as we have a, you know, a particularly low burn rate. The main takeaway from that financing though is the fact that it was the first time that we've expanded it out to European investors.

A large portion of that financing went to strategic partners over in Germany, strategic investors should I say, over in Germany. So that's something that we've been keen to take on. We realized that there was a market out there that we need to start marketing the company to. And this year, moving on over the next 12 months, the fact that we've got German investors involved in the company now should make it easier and it's going to be a focus of ours.

SH: And can you also provide us some updates on the drill program at Kirkham Property. The early results look promising!

PO: Absolutely. But if I can just take a step back just because I think it would help guys that aren't aware of the story. A typical junior strategy within the junior space is to raise cash drill the heck out of a target, raise more money, drill, raise, repeat until obviously a discovery is made, or they walk away from a project. And in the meantime, companies often suffer from huge dilution, often have to go through the process of rollbacks and then obviously repeat that process. Metallis made a decision a long time ago to take a different approach to that. And so we like to think that for a junior of our size and our market cap, we really have taken on sort of a science-based exploration approach.

And it’s shown by our operating budget, a large portion of that goes towards the right technical team that we have in place. And that technical team utilizes a wide range of technologies to support the exploration, not just drilling. So examples are Dr. Bouzari who's with the mineral deposit research unit at UBC, and he heads up the project that studies BC porphyries. We have Jules Lajoie, he's a geophysicist, and he has over 40 years working in the space working for all kinds of majors. Andrew McIntosh, who is essentially our GIS specialist, and he works on 3-D modeling. He has past experiences working with a lot of majors. And then obviously we have our own Dr. Razique, who is our chief geologist. He was involved intimately with the discovery of Reko Diq over in Pakistan.

Dave DuPre is our VP Ex, 40 years experience in the area, was intimately involved in the Eskay Creek discovery. And I can go on, but essentially that's just to show that we put a lot of emphasis on the technical and the science-based exploration and just not throw, you know, millions of dollars into drilling. So I wanted to mention that because this year prior to our drill program we had a phase one, if you like program, which involved a lot of relogging of the core from previous holes. Dr. Bouzari was up on the project this year involved in that relogging, also conducting SWIR analysis. A lot of technical work was done to relook at the past drilling and the deposit itself and the target of the Cliff target that we've been working on this year, to really come up with this model, after that, we identified the gold mineralization exists outside of the Monzonite, whereas previously we thought it was constrained. The mineralization was constrained into the Monzonite, so we found it existed outside of that That was a big breakthrough and we also needed to go deeper.

Coming back to your question, the drill program this year was really designed to target those deep, higher grade zones that we were after. This theory pretty much is just to show that the deposit improves and increases grade with depth, pretty much like KSM, and Red Chris. So that's why this drill campaign was designed. It was just to target those areas. So as of last weekend, we completed our fifth and final hole. We’ve actually wrapped up the drill program, demobbed, and all the guys now are back from camp. We completed a little bit over 4,000 meters in five holes.

The average depth of the hole was a little over 800 meters, so by far the deepest holes that we've done over the last two or three seasons, and all the holes now as of this week are in the assay labs. We staggered the holes, so to go back to the assays, the first hole, once it was completed you know logged and analyzed and core cut, broke up two samples, that was done straight afterwards. So we staggered them across, but I'm sure as your listeners know, we, as well as many companies at the moment are suffering from delayed assay results, which can be really frustrating.

But I think, the other thing that's happened this year with COVID, as well as an absolute huge amount of money being raised in the space, meaning that there's just a lot more companies drilling a lot more holes and, you know, needing more assay results, which is a positive thing. Essentially that's where we're at the moment. We're just waiting for those results to come back now. And I could touch on, we made a decision a little while ago that we won't release anything visually into the public domain. Just because we've seen companies get caught out in the past reporting on visuals. But I guess all I can say is that so far, our geological team are happy with the visuals of the drill campaign.

SH: What’s the long-term vision for Metallis Resources?

PO: Well, from a corporate point of view, it's essentially to carry on with being fiscally responsible with our approach to running this company and to continue to control our share structure, because at the end of the day that just protects shareholder value, and it's a cliche, but it's the truth. So if, and when we make a significant discovery our investors will see maximum returns. From a property point of view, it’s really to carry on with the vision of our namesake, or the properties namesake Dr. Rodney Kirkham, who originally staked the property, who we decided to name it after. I just want to touch on him very quickly if I can. Dr. Kirkham had a 47-year career in the Canadian mining industry and that included projects with Newmont.

One of his projects with Newmont was mapping and exploration of the Unuk River, which is where the Kirkham property is. And he also worked 29 years as a research scientist with the geological survey of Canada. So when there, he ran multiple studies documenting geology and mineral deposits in the Sulpharets area of BC, which is where KSM is 10 kilometers to the east. So why is this important? I think, when you look at a man of his stature, who was recognized in the industry and thought of very highly, and you look at all of the work that he did, on a personal level, when he made the decision to stake some claims in the area - and the Golden Triangle was wide open at this time - of all the areas that he decided to stake, it was around the two claims that, you know, host, if you like, the Hawilson Monzanite and that seven and a half kilometer trend. So Dr. Kirkham really saw something in those two claims and, and this, this trend that he had obviously seen with his work looking at KSM and what have you. So really our long-term vision is to realize this for him, for his legacy and for his family, who are still shareholders of the company.

SH: Thank you for taking the time to speak with us, Peter. Is there anything you’d like to add about the company before we finish?

PO: If I can just a really brief, I really do encourage listeners to do their own due diligence when it comes to investing in the junior space, especially exploration, like I said, it's high risk. And so I think with that in mind, I'd encourage your listeners to take a look at our website. Also, secondly, myself and the management team, Fiore Aliperte the CEO, especially, we’re like proud parents, if you like, when it comes to this project and this company and we love to talk about our child, and we're very proud of it. So if, if there's anyone out there that is interested in asking questions and finding out a little bit more detail, you know, we're one of those companies that answer our own calls. We don't outsource I R services to an external entity, so we encourage (at the end of the day, our wages are paid for by investors), our responsibility is to answer questions. So I really encourage people to, to give us a call and ask us any questions. My email address is I'll always do my best to get back to you guys in a timely manner.

And lastly, one other thing I'd like to say is that this year has been particularly tough for the guys up in camp, obviously, because of COVID. Also because of the weather has been like the worst for decades. So it was a real, a real nightmare to work in this year, but more so because of COVID, because of the protocols we'd put in place the guys were essentially asked to, stay up on camp a little bit longer than they usually would do. So in the public domain from the management team at Metallis, we’d like to thank both our geological team and obviously our contractors that worked on the project this year.

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FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.

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