Emperor Metals Inc. (CSE:AUOZ) is a gold exploration company focused on its flagship Duquesne West Gold project in Québec. The project is host to a historical resource of more than 700,000 ounces of gold and has released its Phase 1 drilling results.
The Emperor team has led more than 25 public mining companies and raised in excess of $500 million to fund exploration, development and production projects worldwide. CEO John Florek joins The Market Herald Canada to talk about Emperor’s Duquesne West gold project, how the company squares up with other advanced explorers, and its progressive use of artificial intelligence (AI).
TMH: John, you have just released assay results from the Duquesne West Gold project – 5,500 metres of the over 8,000 metres has been completed. What did you find and how do those findings inform your mining and financial estimates?
Florek: We released in the press release two holes, partial results for drill hole one and two. We’re currently on drill hole 11, so we have a lot of newsflow ahead of us but those two drill holes were quite significant in regards to our thinking on the deposit. In hole one, we had 11.7 meters of 5.63 grams per ton and that includes an interval of 5.75 meters of eight grams per ton. It’s pretty homogenous mineralization. It’s a beautiful looking rock, makes it easy for mining.
And then hole two is similar. We had a high grade hit of over 10 metres of 3.9 grams per ton but more importantly, we started seeing mineralization at depth in the quartz-feldspar porphyry. In hole two, we hit 25 metres of 1.69 grams per ton and this is important because we see this mineralization coming up to surface.
We think that no one’s really looked at the open pit potential here, but it looks like this mineralization is coming to surface. This adds a new dimension to what we’re trying to do here.
TMH: If you could elaborate on the grade …. DQ23-01 and 02 exceeded the average thickness and grade of the deposit. What does this suggest?
Florek: It suggests that it’s a really robust gold deposition environment. We are right along the porcupine dust or fault, our property straddles it. So that’s really exciting to see that these thicknesses are supported by these grades and it would cause little dilution in a mining scenario for a high grade underground gold deposit.
But like I said, more importantly, we’re excited to see the opportunity of a low-grade bulk tonnage open pit mining scenario presented from these recent results above this high-grade gold deposit, as well as the potential for low-grade bulk tonnage gold at depth.
For example, the Gold X Mine east of us in Val D’or is mining 3.3 million ounces of 1.62 average grade because they have robust thicknesses of low-grade mineralization. So beneath the open pit potentially we can also have low-grade material to add ounces to our high-grade deposit.
TMH: The property lies within the historic Duparquet gold-mining camp in the southern portion of the Abitibi Greenstone Belt – a tier 1 mining district. What can you tell us about the strategic location of the project?
Florek: It’s very strategic. Like I said before, a neighbourhood is everything. We straddle the plumbing system that delivered gold in this district. This district produced 200 million ounces already. So that’s really exciting.
In addition, within a half an hour drive from us, we have various mining infrastructures – about six different mines, half an hour to 45 minutes (away). So if you view this potential as a satellite deposit, we didn’t have the cost incurred with excessive capital expenditures, creating a mill or a building (or) a tailings pond.
We can just truck this to the various facilities in the region. We have plenty of power, workforce, everything is there for us. So these are more valuable ounces than elsewhere because of all this infrastructure located around us.
TMH: You are one of the few companies using AI, using it to create a 3D model of the deposit. Can you explain how AI is used and the potential advantages to Emperor?
Florek: Absolutely. I mean, people cannot calculate trillions of calculations a second. AI allows that ability to do and construct models overnight. In addition, we can make multiple models that we could actually explore and see which ones are proven up successfully. So that’s what we’re doing.
Before we even acquired this deposit, we evaluated it and built the first ever 3D geologic model and mineralized model using AI. So this company got its birth in artificial intelligence, one of the few juniors out there, if any other that is used in AI exclusively.
TMH: Let’s talk about the comparable between Emperor Metals’ other Quebec exploration companies in the advanced exploration stage – Maple Gold Mines, O3 and Amex Exploration. How does Emperor match up?
Florek: These are all advanced stage projects. We’re right in the district, some of those other companies (are) out on the outskirts of the district. So we’re closer to the mining infrastructure.
Now our peers, they’re ranging from $50 (million) to $200 million dollar market cap. Right now, we’re sitting at $3 (million) to $5 million market cap. So huge potential for market cap growth. We’re just trying to get the story out there.
We have numerous catalysts to come because we announced partial results for hole one and two. Like I said, we’re on hole 11, so there’s more results that’ll follow and right now we’re kind of drilling with holes 11 and 12, 13 and 14, potentially the open pit scenario so we can get a better understanding and kind of show that to the market that, “Hey, we have some robust thicknesses, we can see from historical drilling, they only spot sampled the near surface materials.”
Seventy per cent of the core near surface wasn’t even sampled, and we’re seeing that continuous mineralization as demonstrated in hole two that this open pit potential does exist on the property. We’re quite excited.
TMH: In your opinion, what is Emperor’s competitive advantage?
Florek: I think the competitive advantages we have (are) multiple avenues to grow ounces. Like I said, the open pit, the high-grade underground and the low-grade bulk tonnage underground and the use of AI allows us to really develop these concepts quickly and effectively to make a nice streamlined exploration approach.
Right now, we have about $250 all-in costs per meter and that includes assay and logging drilling, all those ancillary fees. Elsewhere outside the district, people run into $400 to $600 a metre. It’s really cost-effective exploration and it’s a really good project.
TMH: And can you break down Emperor’s capital structure, with more than 54 million shares outstanding?
Florek: Management and friends of management owns about 30 per cent of it. Most of the other 70 per cent is held by retail. We’re here to change that. We want to get this out into the public and hopefully get the support of institutions to allow us to continue with this very exciting project.
TMH: As we look forward, how are you expecting Emperor to grow and what is in place to accommodate the forecasted growth?
Florek: We expect Emperor to grow through those three scenarios. Open pit, we’re going to be adding ounces, that’s what we’re doing.
Open pit, high-grade underground and low-grade bulk tonnage. So those two scenarios, open pit and the low-grade bulk tonnage, they’re new. Before we were forecasting 2-to-5-million-ounce potential but with the open pit and low-grade bulk tonnage scenarios, now we’re starting to look in the 5-to-10-million-ounce range for a potential for this type of project.
We’re quite excited about our newsflow coming up and we’re also looking at other opportunities, and so that’s what we’re doing. We’re making sure that we look for other opportunities in the district that we could append to our company.
TMH: Is there anything else you want investors to focus on when they consider adding Emperor Metals to their portfolio?
Florek: It’s a $3 million to $5 million market cap. If we get to where our peers are, we would be 10 to 20 times the value added to your investment.
We are listed on the Canadian Security Exchange under AUOZ gold ounces. So it’s easy to find.
We’re quite excited about having investors join us on this journey of discovery and add ounces to this high-grade gold deposit that now has this open pit potential.
For more information on Emperor Metals, check out emperormetals.com.
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