(CLICK IMAGE TO PLAY VIDEO)
When
Stockhouse Editorial last visited with
Fabled Silver Gold Corp. (FCO) (
TSX-V: FCO,
OTCMKTS: FBSGF,
Forum) in February, we learned about the company’s
‘expertise, exploration, and execution’ at its cornerstone Santa Maria Property at Parral in the State of Chihuahua, Mexico.
Now, in this intriguing video Q&A podcast, we’re back with company CEO Peter Hawley to update shareholders and investors on what’s been happening with Fabled Silver Gold over the past six months and what the company has planned for 2021 and beyond.
SH: To start off with, Peter, can you tell us a little bit about yourself and the history of the company?
PH: Okay, let's try 35 years in 35 seconds.I have two degrees; my first degree is a mining engineer and the second one is in geology, and I started off my career in Val-d’Or Quebec. And Val-d’Or in French means Valley of Gold, hence I started at the Sigma Mine, which is the longest producing mine there for Placer Dome, way back when. And then after Placer I ended up with Aur Resources part of the discovery team and we did the Louvicourt deposit, and VMS deposit.I then went on to work for Richmond Mines over putting the hammer down deposit into production in Newfoundland. From there I went down to Mexico, and I guess that's my real expertise, so to speak and in MexicoI started a private company in 1998 called Scorpio Mining.
We discovered various deposits. Our idea, I guess you could call it, that as part of the design for a bill in the mill, the mine, originally there was me, and then me and another person, and to the point where it came up to about 450 people.We had the mine mill inauguration in 2009. In 2011 we were bought out by America's Gold and Silver Corporation, Darren Blasutti. I created Scorpio Gold Corporation and we became an eat, sleep gold operator just outside of Tonopah Nevada. In 2016 I stepped down and started resigning from various boards I was sitting on, and I thought I would retire. Then a friend of mine, looking at the potential of putting the Santa Maria into production, asked me a few questions about some milling ideas.
I was granted into the data room and what I saw, I've been looking for one of these for the better part of 25 years, and in Mexico, and I couldn't believe it. So hence one of those things, I’ve got to have this and as such came out of retirement, and we put it into the company. Fabled was called Fabled Copper but when I took it over, we changed the name to Fabled Silver Gold Corp. Then we put the Mexican project in it in December and did a capital raise of $4 million. It was oversubscribed, I think we closed at $4.6m and the shareholders did very well, and our coffers are full. Actually, the funny thing is Dave, is what doesn't happen very often is that the original raise of $4 million and then of course, $4.6 million. And then you pay your commissions and everything else, so you're left with $4.1 million in change or whatever it is.
We did the first time ever IP survey on it which wasn't cheap and outlined 12 anomalies. Then we started 8,000 meters of drilling on surface and then we increased that to 9,200 by going underground, also another drill. And here we are today, seven months later and I have more money in the bank account than I did at the beginning of the financing, because of all these warrants being taken down. I guess the shareholders like what we're doing and also as you know,part of it is the spin-out of the copper assets and Fabled Copper down the road. So that's a little bit of my background over 35 years or so.
SH: Can you tell us what makes the Santa Maria property so special?
PH: You look at lot of these things, Dave, over a period of time and some of them there's a gut feeling just based on experience, but this onepeople have to realize that there's reasons why certain areas are blessed in a lot of silver, so to speak. It's because it's the right geological setting, the right plumbing system, etc. So one of the things you look for is you want to go into a camp that has a proven track record, and as such the Parral area has produced over 800 million ounces of silver to date and that's one thing. Of course you have all the big boys there and GoGold is there and Endeavor Silver, Grupo Mexico, their IMMSA operations and everything else, but here is the kicker. The kicker is there's two main trends in the Parral area.
One which Endeavor Silver and GoGold are on, which has produced historically about 200 million ounces, the other 600 million ounces is a separate trend. It's about 45 kilometers long. At the top of it, you have Kootenay Silver with her humongous La Cigarra deposit and as you travel down,this trend is kind of a Northwest trend, So as you travel to the south down this trend, you enter into Grupo Mexico, or the IMMSA Division and the IMMSA divisionat the bottom end of this trend where they have their main facilities, mining facilities, complexes, and everything else.That has been an operation, believe it or not since 1532 and it still is. It produces approximately, the last I remember, was about 4 or 5 million ounces of silver a year plus by-product.
Well, our claims butt up against the boundary of IMMSA Group of Mexico’s Santa Barbara unit, and six kilometers away is their mine milling facility. So one would have to imagine after from the 15 hundreds to today, to 600 million ounces, one would have to imagine that it's pretty hard to believe that there's this imaginary wall between IMMSA’s boundary and our boundary that doesn't contain anything.So that was one of the places. Location, location, location, you've heard the saying - you've been around long enough - in the shadow of an old mine, you'll find a new mine, and this is a classic example of that. And the reason why is because it's very well endowed with a lot of silver, but within the silver envelope, if you want to call it that, you have these very high grade structures and hence depending on, down the road, knock on wood, depending upon the metal prices, you have the flexibility to do low-cost bulk mining if you wish, or you can do higher cost, narrow vein miningand go for grade, if the prices are very low, or you can do a combination of bothand bounce between the two of them. Previous to that, it was always thought as a very super high grade, fairly narrow vein deposit, but it isn’t, and we've proved that. So that's the reason we're there.
SH: Fast-forward from the days of the Spanish conquistadors, you just announced diamond drilling updates from your drill program at the Santa Maria Property. Can you highlight some of these “bonanza-grade” silver results for our investor audience?
PH: The latest one was hole15 that we reported,and to give a little background, we were talking about these high grade structures and everything else, and everybody thought there was two veins on the property that were basically trending East-West.One was called the Santa Maria, and the other one was called the Santa Maria Dos. And they're always treated geologically or reserve wise as two separate veins and there was no other veins that had mineralization.I think to date we've made probably about four or five discoveries of new trends, new veins. As I said earlier, this is endowed in silver. So a high grade intercept, hole 15 we're checking to the plunge of the mineralization to the west, which has never been drilled.
We are very fortunate Dave to hit 2.2 kilos of silver or that's approximately 77 troy ounces and that was when a larger envelope of about 23 meters or silver. So again, what I'm saying is that the 23 meters in today's price,could you long hold it underground? Yes, you could. 77 Troy ounces of silver, can you mine that? Yes, you can, but you never want to leave anything behind. You want to take it all because once you leave there, there's no going back. Especially with certain mining methods. So our understanding of the multiple structures, people have heard me yack about this enough since I've taken over, is that if everyone thought that there's only an east-west trend and we've proven yes it is but you know what, The Santa Maria Dos is a hanging wall of the structure and the Santa Maria vein, or what they thought is actually the foot wall and that distance between the two of them, it's mineralized from one to the other with high grade structures.
When you hit another structure or structure on structure and they smash into each other, and the plumbing system is right and everything else, you get these big dilation zones and basically, it's preparing the ground for more room to put in more silver and hence, you'll get these huge intersections. I think one of the biggest intersections we hit with something like 62.5 meters of some crazy amount of silver or whatever. So they get very huge and hence because of the IP geophysics and the magnetic geophysicswe did for the first time ever, we were successful identifying the geophysical signature of these structures and hence a success in our drill program and finding north cell structures and then they run into the east west and then boom, you got a big zone.Here comes the Northeast trending zone, it hits the north structure, it hits the east-west structure, boom. Now you've got two big dilation and so-and-so. So this thing builds out quite fast. So it’s been exciting and now that we're understanding how it works, I think that the shareholders, the company will see more and more exciting results coming out as we go forward.
SH: For company shareholders and potential investors, what kind of future development and progress can we expect at your Santa Maria project?
PH: Well, as I mentioned, we have one drill underground and as people have heard me say, I call it drilling from the belly of the beast. So we're actually sitting in a drip that was this underground workings that were developed for taking bulk samples that were taken in the past. We're sitting in the middle andif we turn the drill one way and drill north, we drill to the foot wall and hit the Santa Maria Dos Vein. If we turn around 180 degrees drill, the other way we drill through mineralization and then hit the hanging wall of the Santa Maria. So we're going to have a lot of detailed information fordown the road if you're going to do a mine planning study from underground, and that's just got going, we're on the hole four or five right now and it probably still has 1100 meters or 1200 meters to go. It'll be a while. On the other side of it on the drill program we’re about half or a little over halfway through the 8,000 meters surface drilling but as I said earlier Dave because of the shareholders being so nice to us and taking down the warrants and the very strong treasury now that if warranted and believe me I've had this chat already, but we'll see, but as a program kind of getting close to the endand if it's one of these things where gee, we should drill another 4,000 meters or 5,000 because then we could do a resource study, a very good resource study or something like that. Sothat's kind of coming down the pipeline and I think that decision will have to be made probably in September or early this fall.
As people can see from various releases we put out and we've been trying to be totally transparent in what we're doing and explain what we're doing. Well, let's put it this way, in the eight yearsthe previous owner owned this property, they drilled a total of 9,600 meters. In probably eight months or nine months, we’ve drilled 9,200 meters. That's how hard, I'm hitting this thing and so that's what you do. Anybody that's been in this business a long time Dave, the first thing you want to do, I don't want to waste the shareholders' money. I don't want to waste your money. I don't want to waste my time. You know, let's kill the beast, hit it hard and don't waste anybody's time and money. Sowe've beentrying to put a stake to the heart of this thing, but it just keeps on going.
SH: You’ve also recently announced a private placement of up to $6 million dollars in connection with the proposed spin-out of your copper assets. This may be news to many investors. Can you unpack the benefits of it?
PH: Okay. I'll, I'll try to give you a little background of the copper assets and why we never talked about them for a certain amount of time. Previous management that I replaced, and I mean I replaced from the top to the bottom. They made some bad property agreements on the copper assets and the deadline for this humongous payment was due March 31st and in reality, it was $5 million, to tell you the truth. For where the properties at the copper properties are at and everything else at this point in time, I'm sorry, I wouldn't pay anyone $5 million, and on top of that, I'm Scottish (LOL) so that doesn't help at all. So I arm wrestle with the vendors, and we ended up settling on two hundred thousand of which was paid. So now I can move forward.
We won't get into it , it's a whole different conversation about the merits of it and everything else, but I will say there is a lot of copper there and historical tonnage. There are all kinds of very sexy things, but after consultation with tax specialists, lawyers, and everything else, we found out that the best way to do it was virtually a plan of arrangement of the company, taking the assets and for the Fabled Silver shareholder for every five shares that he owns of Fabled Silver, he'll get one free copper share in the new company. Which is a non-taxable event. So it's free, we're giving it to you. So not only did you get the benefit when you came in Fabled Silver going after silver but now you freely get the upside of copper and we both know copper's quite interesting these days to say the least.
As part of that we announced a $6 million placement in the company. The terms are very similar to what we did with Fabled Silver, it was 5 cents a share and 10 cents a warrant for two years and then there was a flow-through component, slightly higher than that because of the tax advantage. Very shortly to schedule closing of the finance, I think it was said in the news release of July 12th and I have unequivocally have no doubt that that's going to be done. I mean, the reception has been tremendous, you have no idea. And a lot of Fabled Silver shareholders have gotten a hold of me and just loving the idea. So yeah,it's a win-win on everybody's plate.
SH: I have to mention your stock has been on a bit of a roller coaster ride over the past seven months. What can you tell our investor audience regarding the current valuation of your stock and why you think it’s a good buy right now?
PH: If I put myself in the shoes of an investor and I'm going to buy shares in this company, the first thing I personally am interested in, is if I buy these shares when the time comes, I want to sell them, can I sell them? You've seen a lot of companies like that. They trade by design only, they’re not liquid. We trade on average over a million shares per day. I think one day we traded 15 million shares. It's just crazy the volume and alsolisting on the OTC on the full board helped with theUS content and everything else. So that's the first thing, if I get in, can I get out and hence we're very liquid and everything else. Number two as we put out various news releases, the stock took off like a rocket, I think at one point it went from in December of 5 cents by February or something, it peaked at 40 cents.
Of course, you know, 5 cents to 40 cents, that's eight times your money. So there was a lot of profit taking going on and the volume was there to do it, but you got to remember these people that were making money or whatever, at the same time they had warrants that they didn't have to exercise until December 2022 long ways off and they started taking them down, showing they're happy with what we're doing. So that's held the share price down, it just goes sideways a lot of times, it’s warrants being exercised andone in and one out and everything else. Then we hit a rise and then I guess the other thing,and this is totally out of my control, gold was right on the doorstep of $1,900. Silver waslike 29 and was going to go to 30. everybody's trying to see, right.
We look at the price today and it just pulled back and part of that was due the to the feds making a couple of statements here. Sothat's out of my control. I can't do anything about it. So I would say the entry point right now is absolutely excellent for the shareholder. It's about 15 cents, a little around half where it actually peaked and when we talked about 2.2 kilos, and now we understand this thing. Then the other thing, as you know Dave you have to really consider is that there was $9.2 million in warrants in total, and I think there's about 3.2 million left or something like that. So you're taking that baggage or that the potential loose cap on the stock, it's being removed. So once you whittle that down to a certain amount, and then if I can doand the team can do what we're supposed to do and come up with good results, this thing will move. Absolutely. And of course, if the price of metal moves, we’ll follow that track.
SH: And finally, Peter, if there’s anything I’ve overlooked please feel free to elaborate.
PH: The only other thing I would say, Dave, if the shareholders or people are interested in the company and everything else, if you told me I'd be doing this, I'd tell you it'd be crazy, but we we're doing a lot of videos and here we are, you and I are talking and we've known each other forever and whatever, but if you go to our website fabledsilvergold.com, and in the top right-hand corner, we actually have a tab for just videos, various videos and every news release we put out. It's a company not only with a very detailed news release, with sections and pictures. I try to explain things as much as I can to the shareholder because I know there's some of these releases people put out are just too technical. Like what are they saying? Then we have the news release, and we have the videos and they explained it with a lot more pictures and stuff. So that that'd be very informative for them. So I would direct themto there and watch us.
For regular updates, please visit
fabledsilvergoldcorp.com.
FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.