By Dr. Allen Alper, PhD Economic Geology and Petrology, Columbia University, NYC, USA
Michael Hudson, Chairman, CEO of Mawson Resources Ltd. (TSX: MAW): High Grade Rompas and Rajapalot Gold Projects in Finland (PDAC Booth # 2941)
Mawson Resources Ltd. (TSX: MAW) is as a leading Nordic Arctic exploration and development company with a focus on the flagship Rompas and Rajapalot gold projects in Finland. We learned from Michael Hudson, Chairman, CEO and director of Mawson Resources, that they have a very large-scale, very high- grade, early-stage gold discovery in Finland that is now very well poised for the market turn-around and renewed enthusiasm from the majors. They have two rigs and are moving it up to four rigs over the next few weeks, turning 24/7, so lots of news-flow coming
Dr. Allen Alper This is Dr. Allen Alper, Editor-in-chief of Metals News, interviewing Michael Hudson, who is chairman, CEO and director of Mawson Resources. I wonder if you could give our readers an overview of Mawson and what differentiates Mawson resources from other junior mining companies.
Mr. Michael Hudson: Sure Allen, thanks for talking with me today. Mawson is a gold exploration company in Finland. We have a very large-scale, early-stage gold discovery, a new district that we've been working. The discovery was made during 2010-2012 at the start of the last downturn. We've been digging it away, working to get permits, advancing the project prudently during that period. Now the project is very well-poised for the turn around. Permits were received, and well timed, in September last year. This coincided with this renewed enthusiasm for high quality, large scale projects that majors will be interested in with good grades from surface. We have two rigs and we're moving up to four rigs over the next few weeks turning 24/7, so lots of news flow.
We are people, who've been in the business, who've done it all before. Mawson is our next discovery. During the last cycle we took three companies up to half a billion dollar market cap, through discovery and project advancement.
Dr. Allen Alper Sounds amazingly good! You can be very proud of an accomplishment like that. Could you update our readers on your background, your team and your board?
Michael Hudson: We're a very tight-knit, technical group of people. We came out of the majors and have been together as a team for 20 years. Mawson’s leadership is essentially the same group of technical people, with some great external people around us to bring in further rigor.
I am a geologist with 27 years’ experience exploring around the world. We have three other geologists on the board. These include my long term business partners Mark Saxon and David Henstridge. Colin Maclean, also a geologist, sits on the board. He is the co-founder of The Sentient Group, a $2.5 billion resource focused private equity group who is our major shareholder.
We have fantastic people behind us in Canada, who keep the company running behind the scenes. This includes my other long term business partner, Nick DeMare, CFO and Director, and Mariana Bermudez our Corporate Secretary. Recently, we've added some environmental experience at Board level in Noora Ahola, who is our environmental leader in Finland. Noora’s background is environmental administration in Finland. We have a great mix of finance, technical experience, and social licensing environment, which is very important these days, of course, in any modern exploration and mining company. The President of Mawson, who runs the day to day operations, is Nick Cook, who is a very long experienced geologist and a person I have worked with since the early 1990’s. The Chief Geologist in Finland is Dr. Erkki Vanhanen, who is the “Grandfather” of gold exploration in Finland. Nick and Erkki are both supported by a great geological team. So from a technical team point of view, that rigor continues from the board down through management.
Dr. Allen Alper Yes that sounds very good. Could you tell me a little more about the geology of the area?
Michael Hudson: The area is from the Paleoproterozoic era, very old rocks, a greenstone belt similar in age to the Abitibi. A similar age belt of rocks about 100 kilometers north of us hosts a seven million ounce gold deposit that Agnico Eagle is mining.
The first 30 samples, over a 6 kilometres trend, were taken during 2008 at the high grade Rompas discovery by Areva NC. We then purchased the exploration claims in 2010. We have expanded the footprint to 100 sq. km over the last five years. We've found two different styles of mineralization in these rocks. Some very high grades. Our 11th drill hole hit 6 meters at 617 grams at Rompas.
We are now working 8 kilometers away in an area called Rajapalot, where we see consistent grades. This is of course where we have just put out some very exciting drill news over the last few days that included 10.0 metres @ 11.6 g/t gold from 110.2 metres from the Palokas prospect at Rajapalot. These results doubled the depth of the mineralization at Palokas.
Dr. Allen Alper Excellent results! That's really great. Could you tell me a little bit more about your plans for 2017?
Michael Hudson: Drill, drill, and drill, simply put. The benefit of the downturn was that we were able to collect a lot of basic background exploration data, all the geophysical data, the geochemical data, the surface boulder discoveries and the shallow surface drilling. For example we discovered 201 boulders and subcrop grab samples at Rajapalot with >0.1 g/t gold that range from 0.1 g/t gold to 3,220 g/t gold, with an average of 89.3 g/t Au and median of 0.9 g/t Au. So we found lots of smoke and now we're very well placed to drill. This drilling that we've just started over the last month, is the first systematic test with large scale drill rigs going in the area. We are diamond drilling, but also systematically drilling at 150 meter space grid over the entire land package at Rajapalot to test below the thin 3-5 meter thick veneer of glacial till (soil) cover. We call this drill method “base-of-till”.
This is an important point. Only ten thousand years ago, which is very recent in geological history, Finland was covered by glaciers up to 3 kilometers thick. They melted and left a thin veneer of 3 to 5 meters thick glacial melt which now costs of rocks, sand and clay, which covers 99 percent of the area. So to find gold we need to drill! And that is what we are doing.
So drill, drill, drill right through to mid-April, more or less depending on the ice break up. Twenty percent of our property consists of Natura 2000 areas, an EU-defined biodiversity program, where we are only permitted to drill during winter. The remainder of the area, we are just starting to understand with mineralization now extending into those areas. We're able to drill in those areas in the summer period, which will be from June onwards. May is the only month during the year we can't drill because of the snow melt.
Dr. Allen Alper That sounds very good. Could you tell me a little bit about your finances and your share structure?
Michael Hudson: We have 105.3 million shares issued. We're very aware of keeping a tight capital structure, so we have been very frugal in share issuance since 2004. It's still a very tight company in that 60 percent of the company is owned by private equity groups. Thirty-five percent is in the hands of The Sentient Group, which has been a fantastic supportive shareholder for the company over the last five years. Twenty percent is in the hands of university endowments in the U.S. and insiders still have 6 percent. Big money is backing this project. We have approximately CDN$7.5 million dollars in the bank. Now is the time to spend that through drilling and create value through discovery. So we plan to spend about CDN$4 to 4.5 million this winter, which will leave us, by the end of Q2 this year, with about CDN$4 million.
Dr. Allen Alper It sounds like you’re in a very good position to move the company forward and to do your drilling. That's excellent. What are the primary reasons our high-net-worth readers/investors should consider investing in your company?
Michael Hudson: Well, it's all about timing in this business and that affects all of us. We have seen the market change where good exploration companies are gaining attention as the majors are looking down the chain at the next generation of potential projects that can go into development. That's certainly our recipe here. We want to create an asset that is large and high grade; a tier one asset.
We have all the hallmarks of those criteria today. We are fortunate, because not every project does. So, timing and potential to advance towards that tier one asset will obtain premium valuations in this market. Now it is our challenge to de-risk the project through exploration. It’s important to understand that the project is in the hands of people who've done this before. We know what we are doing technically, we know what we are doing in the capital markets, and importantly, we know where to put those drill holes. We have that mix. Those are the three key factors that investors should focus on when putting money into any company of this level and scale.
Dr. Allen Alper That sounds excellent. Could you tell me how it is operating in Finland?
Michael Hudson: It's cold for an Australian! Finland has been a mining jurisdiction for many hundreds of years. There are mines that have been put into production over the last decade, a number of mines. The majors are in the country. In the area, we have Agnico Eagle operating at the 7 million ounce Kittilä gold mine. We have Boliden mining at Kevitsa. We have Anglo American exploring just down the road from us. So it's a mining jurisdiction. It has the great rocks. It's not the fastest jurisdiction in terms of its permitting speed. We've been witness to that. It's slow but secure.
Dr. Allen Alper That sounds good. Secure is Important. Is there anything you'd like to add, Michael?
Michael Hudson: Keep an eye on the results. We're in an extensive program. We look forward to releasing more and more results that will come from this drill program. We've had a fantastic start. It is all the result of long term study and positioning to get us to this point and we hope to deliver more.
Dr. Allen Alper Well that sounds excellent. That's really great.
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