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Meridian Mining UK S (TSXV: MNO): Becoming the Next Mid-Tier, Copper-Gold Developer in Brazil; Dr. Adrian McArthur, CEO and Director Interviewed

on 7/14/2021
We spoke with Dr. Adrian McArthur, CEO and Director of Meridian Mining UK S (TSXV: MNO) - a mineral exploration company, focused on becoming the next mid-tier, Copper-Gold developer, with a focus on Brazil. The Company’s priority is the Cabaçal project, an advanced, VMS district scale Cu-Au project, located in the state of Mato Grosso. The project has an extensive database of 400 historic diamond drill hole results. It has a significant historical Cu-Au resource. Near term plans include, a 10,000-meter drilling program, mostly in the vicinity of the historical underground workings, as well as to test highly prospective geological, geochemical and geophysical anomalies.

Meridian Mining

Al Alper, Jr. This is Allen Alper with Metal’s News. I’m talking with Dr. Adrian McArthur, who is the CEO and Director of Meridian Mining. Meridian Mining is a large copper gold VMS project in Brazil. Adrian, could you give me an overview of Meridian Mining and what makes you unique?

Dr. Adrian McArthur:Meridian Mining is focused, very heavily at the moment, on its Cabaçal Copper-Gold Project. Cabaçal is a historic mining operation, executed by BP Minerals and subsequently taken over by RTZ. The mine was discovered in the 1980s. It was a very intensive campaign of exploration, involving over 200 people and with over 20 geologists. It was a series of geochemical and geophysical anomalies, which were located, within a 30-kilometer strike of the volcanic stratigraphy. Early-stage drilling found significant widths of disseminated stringer and Copper-sulfide mineralization, along with gold mineralization. Over 400 drill holes were drilled at Cabaçal itself, over 700 drill holes were done in the belt.

Al Alper, Jr. You have a camp size VMS gold project that you’re growing, with an historical operation. Could you tell us more about your copper-gold VMS project?

Dr. Adrian McArthur: The Cabaçal Copper-Gold Project is a significant district scale opportunity, in the western part of the state of Mata Grosso, in Brazil. We have tenements that cover a strike vein of about 36 kilometers of Proterozoic rocks, ancient rocks that are prospective for this style of mineralization. The area was originally discovered by BP Minerals, back in the day when oil companies were exploring for minerals. They discovered three new Greenstone belts and one of the belts hosted the Cabaçal Copper-Gold Deposit, which they’ve developed as an underground mine. We now have an option agreement on that position, and we’ve just initiated an extensive drilling campaign, to physically validate the historical results, which we think is a significant opportunity for revisiting the project, with the open pit concept. Then we will follow that with a regional exploration program.

Al Alper, Jr. Tell us a little bit more about the historical operations at the site?

Dr. Adrian McArthur: The mine was initially developed by BP Minerals, and it went into development in the late 1980s. It operated for five years and produced 900,000 tons of copper-gold, silver-ore. The project was acquired by Rio Tinto, when they took over the mineral assets of BP Minerals. Rio Tinto operated the underground mine for a couple of years. It wasn’t a mine that was of the large scale that Rio Tinto was interested in.

They decided to put the mine on a Care and Maintenance and Closure Program, despite still having reserves and developments, which effectively froze it in time. An interesting aspect of their operations was that they operate to a gold only cutoff grade, so despite being a Copper-Gold Silver deposit, they only mined areas that grade about three grams per ton gold. What that has left for us to evaluate is a much broader, extensive package, of stringer, stockwork and disseminated mineralization.

The underground mining was a “room and pillar” style, with mining voids of about five meters height. The much broader package can be anywhere from 30 up to 100 meters in thickness and it is very shallow. It’s an excellent geometry of excellent scale for an underground operation that has about 23 million tons of 0.6 copper and 0.6 gold. As a historical resource, part of our work is to validate the historical drilling and bring it towards 43-101 compliance.

Al Alper, Jr. That sounds excellent. What are your plans going forward? How are you going to go about validation?

Dr. Adrian McArthur: We’ve mobilized three rigs to the project, executing our programs here in Brazil. For the current budget, we’ve set ourselves on a program of about 10,000 meters. Maybe 7,000 to 8,000 meters of the program will be dedicated to drilling, in the vicinity of the historical underground workings. Part of that will be trying to locate and twin hole, so where we find an old drill hole put in by BP Minerals, we simply drill within about five meters of the same position and confirm that the overall width, position and grades are in line with expectations.

We have a high level of confidence in the historical data, because it was executed by major companies, with strong budgets, and they successfully operated a mine based on the same data. But in the modern era, it’s necessary to add a little bit more detail, quality control methods, analytical methods. Despite having an extensive historical database, we need to drill maybe about 30 or so twin holes to prove that the historical results are reliable.

We also have access to some of the old drill core. Part of the core collections were donated to the University of Mato Grosso, so we’ve been able to sample a selection of that core, put it in for analysis and some of those results will be published shortly. But we have a high level of confidence in the data. Over 400 drill holes were drilled into this deposit, so it’s a very intensively studied project.

Al Alper, Jr. Excellent. Can you tell us more about yourself and your Management Team that is working in Brazil?

Dr. Adrian McArthur: Certainly. I’m a Geologist by background. I graduated in Australia, from the University of Melbourne and subsequently did a PhD in Volcanic Systems at Monash University. A project like Cabaçal, which is hosted by volcanic rocks, is very much in my area of expertise. I’ve worked in mineral exploration and resource definition, for the past 25 years, at a combination of locations. I started my career with Western Mining Corporation, in Western Australia, worked there on base metal and gold deposits in Australia and subsequently, with various companies throughout Australia, a little overseas and in China and Southeast Asia, in Africa. I’ve been, for the past six years, working in Brazil with Meridian. We initially started here in Brazil as a manganese producer, but last year we negotiated access to this project and it’s rapidly transformed the Company’s pathway to a significant development trajectory, we believe.

Al Alper, Jr. Well, it sounds very exciting. Who else is working down there with you in Brazil?

Dr. Adrian McArthur: We have an International Board and an Executive Management Team. I’m basically leading a Team of Brazilian Nationals, in the Country. We have a Team of geologists here on the project. More broadly, in the group, we have a range of specialists, covering a range of disciplines. We have an Environmental Manager, legal capabilities, engineering capabilities, project study capabilities, obviously accounting and financial capabilities. We have our Executive Chairman that I work very closely with, Gilbert Clark, who’s currently based in France, but he’ll be joining us here in August.

We have the Executive Management Team, which includes Soraia Morais, she’s our CFO, based in Vancouver. She’s Brazilian, fluent in Portuguese and English. Vitor Belo, our Senior Mining Consultant, we have on board. He’s worked for major companies, Rio Tinto, Kinross, Yamana, developing mines, producing and operating mines. And Joel Brandão, who’s our Resident Manager, who keeps a close eye on compliance and costs and that we’re spending the money wisely and tendering appropriately for our contracts. It’s an experienced Team with decades of experience in mining along with exploration and execution. Certainly, at the Board level, we have a very strong Board, internationally experienced, covering both technical and commercial aspects of the mining industry.

Al Alper, Jr. So how do you find Brazil as an environment for mining?

Dr. Adrian McArthur: Brazil is an excellent location for mining. Not every company operates in this part of the world, but a lot of Canadians and some Australian listed companies are operating here. For me, Brazil’s a great land of opportunity, it has a good environmental and mining legislation that’s clearly laid out. There’s a lot of community support for mining. The landholders receive some royalties from the mining operations. You tend to find landholders are very welcoming of mineral exploration. We have a track record, as a Company, of both opening, closing and returning to past through our operations in Rondônia, so we can point to our environmental credentials.

I think, compared to other areas where I’ve worked, Australia, certainly around Canada, that you do fined that Brazil is less intensively explored. The projects that we have, at the moment, at Cabaçal were discovered in the 1980s when Rio Tinto wound up the operations. There has been very limited work conducted, since that period, to define the Greenstone Belt that has effectively been frozen in time, in terms of extensive exploration. It’s a great opportunity. Brazil is an excellent destination that has wonderful, highly motivated people, a good legal system and it’s a pleasure to work here.

Al Alper, Jr. What is the infrastructure like around your mining?

Dr. Adrian McArthur: We’re located to the west of the capital of Mato Grosso, Cuiabá, which connects our base in a town called São José dos Quatro Marcos. Obviously, the mine has operated in the past and previously shipped concentrate out of the state. Brazil has an excellent road network that supports a vigorous mining and agricultural industry. There are ongoing infrastructure plans for rail and road by the Brazilian government. The government also provides a strong tax incentive for development in this part of Brazil, where the operations receive some discounts to try to develop the northern part of the country.

It's an excellent location. The area we’re operating in is cattle grazing country, it’s been agriculturally based for a long time. We’ve had a good reception from the properties, where we’re currently doing programs. It looks like a long way away from anything on the map, but it’s actually quite well located. The local towns have a population, maybe 20,000 to 30,000 people and good schools, good hospitals and highly motivated people.

Al Alper, Jr. Excellent. Tell our readers/investors a little bit more about your capital structure.

Dr. Adrian McArthur: We have a lot of room to grow, the Company went through a significant restructure last year. We were previously largely backed by a private equity group, the Sentient Group, based in Australia. As part of the restructure, they sold down their position. We currently have shares outstanding, about 111 million, with about 50 warrants. We have good provision from the warrants, with the share price being quite buoyant. The share price has been trading around 60 to 70 since. We’ve had a significant rerating back around late last year, we were trading at 10 cent and above range. With the restructuring we’ve seen a fairly steady growth with appreciation in the share price.

Compared to our peers, our market cap is less than 100 million at the moment. We have excellent assets. In addition to the Cabaçal Project itself, we recently acquired over 480 square kilometers of adjacent Greenstone belts, with geochemical anomalies and geophysical anomalies, again from the BP Minerals era. That’s almost an impossible thing to do, if you try to gain similar ground in places like Canada, Australia. I’ve invested myself in the Company, all the executives have. I think we’re still a good value.

Al Alper, Jr. So, tell us a little bit more about that, you guys have skin in the game?

Dr. Adrian McArthur: Yes, I, the Executive Chairman, and many of the Board Members have invested in the Company. It comes down to the valuation that we have. It’s rare that a project of this nature comes onto the market. A lot of the assets of BP Minerals went on to be successful development projects. This has a tremendous amount of sunk investment, we’ve passed exploration, so we’ve made some contribution, raising the last capital of raisings, and we’ll do so in the next one.

Al Alper, Jr. Could you tell our readers/investors the primary reasons they should be interested in investing in Meridian Mining?

Dr. Adrian McArthur: I think there’s a range of things, but we have a strong, capable Management Team, both experienced in exploration and development. We have a workforce that’s highly focused, not only on exploration, but mine development that will be working in parallel, with the exploration on aspects of the environmental and social studies that go into developing the mine. The Cabaçal Project has a significant historical resource of about 350 million tons of .6 Copper, .6 gold. There are some significant extensions to the mineral system. We can see strong geochemical responses to the northwest of the deposit, geophysical anomalies extending to the northwest and southeast.

Our objective is to drill rigs and always grow that resource, build on that resource. We’re quite confident we can deliver on that, with ongoing discovery, delineation. Copper and gold, obviously, the commodities that are performing quite strongly and have a strong future. The projects here, the assets at Cabaçal Project, sit on a mining lease application, which means that it’s already in an advanced state of permitting, compared to other projects that are sitting on exploration licenses and require several more steps to get through the planning stage.

We have a district scale opportunity. When you talk about exploration and think about analogs, the experience in every other business district in Canada and Australia, is that these deposits occur in clusters. Where you get one, you get several. The fact that this building has been frozen in time in terms of exploration, drilling, evaluation of all these anomalies, our expectation is both here and in the adjacent build so that we could significantly grow our resources, but ultimately reserves through exploration, through the actual programs.

Al Alper, Jr. That sounds really, really exciting! Great location, good team! Is there anything else you’d like to add?

Dr. Adrian McArthur: I think we constantly have a stream of news going out into the markets. We have about 30 odd holes down into the projects. We’re about a third of the way through the drilling program. Up to date, we’ve done about nine of those holes. Your readers/investors can expect a steady flow of information, as we get more and more assays. We’ve recently purchased our own high-powered geophysical equipment that’s being imported into the country as we speak. That’ll give us a significant, sophisticated method to evaluate the build. I think to encourage everybody to follow us on this road through the websites of these releases, the updates to the investor presentations, and I am always happy to field any questions.

Al Alper, Jr. That sounds excellent! It sounds to me like you checked off all the boxes of an amazing, historical resource, district-scale opportunity, of an experienced Management Team, a great Team on the ground there. You’re in an advanced permitting stage, and you’re going forward aggressively, to build this project out. You have a great location. You’re in a mining-friendly area. And it sounds like we can expect a lot of great news coming forward. Thank you for giving us so much valuable information about your excellent Company.

Dr. Adrian McArthur: It’s been a pleasure speaking with you. Thanks very much.

Al Alper, Jr. We’ll publish your press releases as they come out so our readers/investors can follow your progress.

Dr. Adrian McArthur
CEO, President and Director
Meridian Mining UK S
Ph: +1 (778) 715-6410 (PST)

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