Discussion with Dr. Brian Penney Chairman Silver Spruce Resources (TSXV: SSE): Poly-Metallic Silver, Lead, Zinc, Copper and Gold in Chinipas, Mexico
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By Dr. Allen Alper, PhD Economic Geology and Petrology, Columbia University, NYC, USA
on 5/10/2016
Silver Spruce Resources (TSXV: SSE) is a Canadian junior exploration company, using the opportunities provided by current market conditions, to make strategic acquisitions of properties with high potential to generate positive cash flow, with modest investment. Dr. Penney Chairman, Silver Spruce Resources told us that their new property in Chinipas, Mexico has expected potential for seventy five to one hundred million (non 43-101 compliant) ounces of poly-metallic silver plus lead, zinc, copper and gold. With the 43-101 just completed they are putting together financing for a plus 3,000 meter drill program.
Dr. Allen Alper: This is Dr. Allen Alper, Editor-in-Chief of Metals News, interviewing Dr. Brian Penney -Chairman.
Could you fill me in on what's happening with Silver Spruce Resources? I know you recently have done some financing, and I wonder if you could tell me a little bit about that and your plans? Also, a bit more about Silver Spruce Resources.
Dr. Brian Penney: Well, we'll start with our project. We have mining leases in Newfoundland and Labrador. Management changed hands about a year ago and the new management recognized that the market conditions were no longer favorable for uranium and rare earth properties and sought something with better market conditions. We acquired a property in Mexico that's located fifteen kilometers from Coeur's main mine, which is fifteen kilometers from the town of Chinipas. We have full road access. Our property is about ten kilometers by good road from the town of Chinipas which has a population available as a work force. We have water and electricity there, so it's all set to go. And after we acquired this property, circa last June, Coeur bought Paramount Resources for a couple hundred million dollars; they now surround our land. On the basis of preliminary exploration and assays we think that the potential is there to find not just silver, which is basically poly-metallic silver, but lead, zinc, copper, and gold. We think the potential is there based on the preliminary geological work for seventy five to one hundred million ounces, though we have to note that this estimate is still very preliminary and is not 43-101 compliant.
So, on the financing front, the financing we just announced, we used this to make a property payment to the owner and for general working capital. We had some clean up to do from the old management, and we got that all contained. All our bills have been paid from since we've taken over the company, and we are all very excited at the prospect of exploiting the Pino de Plata property.
Dr. Allen Alper: That sounds good; that sounds like you're making good progress right now. Could you tell me a little bit about the team?
Dr. Brian Penney: I am a former high energy nuclear physicist and went into industry over 30 years ago. For the last 20 years I have been an angel investor and companies in various industries in which I have been chairman and a seed investor have created over a billion dollars of shareholder value. We have Stephan Jedynak, a lawyer, who is the CEO of the company. We have Art Brown on the board, who is a venture capitalist and been in the business a long time. We have Gordon Barnhill, who is on the board. Dr. Brad Donovan, who lives in Guadalajara, Mexico, recently joined our board. He is a businessman in Mexico and is very well connected there in the business and political community.
Our geologist, who did the 43-101 report is Leonard Karr III of Denver, an engineer and geologist, comes with excellent credentials. Karl Boltz is our project supervisor out of Mexico, and he's totally fluent in Spanish. He's worked down in Mexico for many, many years.
Chip channel sample 383889 near the middle of the Terrero area, 1.1 m @ 0.257 g/t Au, 557 g/t Ag, 13950 ppm Pb. This sample was not in a mined area and the outcrop was not particularly noteworthy compared to adjacent outcrops
Dr. Allen Alper: Sound great! Sounds like you have a very competent, knowledgeable team. What are your plans for 2016?
Dr. Brian Penney: In 2016, we have the company and we're now going for our project financing. Our budget is eight hundred thousand in this phase of the project, which will give us roughly three thousand meters of circulation drilling and drill pads. The roads are all in there, but we have to do some pad work and minimal geology. It's basically pretty much set to be drilled. So we'll get three thousand meters of drilling which should tell us a lot about the property.
Dr. Allen Alper: Well, that sounds very good. Tell me a little bit about the capital structure of the company.
Dr. Brian Penney: The capital structure, when we took the company over, had fourteen million shares outstanding.
Now we have roughly thirty million shares after the recent financings and the property purchase.
Dr. Allen Alper: Okay, that sounds good. What are the primary reasons our readers might consider investing in your company?
Dr. Brian Penney: We're eight cents a share, thirty million shares market cap; it's probably three or four cents risk. The risk/reward is sensational. That's why they would invest eight cents per share, the reward is outstanding.
I think that's cutting right to the chase, Al.
Dr. Allen Alper: Good, do you want to say anything more about your property? Why your geologist and your group feel that silver and gold and other metals are of interest?
Dr. Brian Penney: Coeur bought their mine down there, the Palmarejo Mine, circa 2001. The owner of our property owned this property since 1984. It's got a vein structure on the west side. This isn't yet 43-101 compliant because it's never had a drill stick, but we felt that we had excellent potential for a small mine. But when we send the geologist in and viewed just half the property, the potential of the property was outstanding. And when you look at the infrastructure, the proximity, there's no problem working it. By road, we're fifteen kilometers from Coeur's Palmarejo Mine, and we have access to a full work force out of Chinipas. It ticks all the right boxes. But having said that, it's never had a drill stick, and that really is probably one of the more exciting components of it.
Dr. Allen Alper: Is there anything else you'd like to add?
Dr. Brian Penney: Well, we can talk a little bit about the terms of our deal, which were redone. We negotiated the acquisition of this property in the absolute bottom of the silver market for the past eight years, a major bear market. So, we weren't necessarily looking for a gold and silver project. But Karl brought the property to the company, and we jumped at it. So, from a risk/reward point of view and a capital structure point of view, there is tremendous risk/reward on this one, for the investor.
Dr. Allen Alper: Well, that sounds very promising.
http://www.silverspruceresources.com/
Silver Spruce Resources Inc.
Suite 312- 197 Dufferin St.
Bridgewater, Nova Scotia
Canada B4V 2G9
CORPORATE ENQUIRIES
Mr. Gordon Barnhill, CFO and Corporate Vice President
Tel: 902.527.5700
Fax: 902.527.5711
E-mail: info@silverspruceresources.com
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