Bill Pearson, the President and CEO of Castillian Resources (TSX-V: CT), has found his niche in the mining industry – bringing historical mines back to life after their closing. Metals News sat down with Pearson at the Vancouver Investment Conference to hear about the progress being made at the Hope Brook gold project located in Newfoundland.
Said Pearson, “My background is as a geologist. I have been in the business for 40 years.” During that time, Pearson has discovered a unique calling within the mining industry. Instead of exploring for new resources, Pearson has found a talent for bringing historical mines back into production after they have been closed. He said, “I have taken old mines and put them back into production.” One example of this is the work that he has completed in Nicaragua. He said, “I worked on Central Sun Mining in Nicaragua on mines that people thought were no good.” The result of Pearson’s work was nothing short of profit. He said, “It got sold and now has a market cap of $1.6 billion dollars.”
In fact, Pearson has become so successful at rejuvenating mines that he is now working with another historical project. He said, “I am trying to do the same thing with Castillian.” The project they are working on is a project that was closed more than ten years ago. Pearson said, “Our primary asset is the Hope Brook gold deposit in Newfoundland. It is a past producer from 1987-1997.” The mine was originally closed, like many, due to the downturn in gold prices a decade ago. Said Pearson, “Of course it closed down in an era when gold was down significantly.” The Hope Brook project was closed when the previous owners hit their own limits. Said Pearson, “They used a cut off grade for the mine at 2.5 grams gold per tonne.”
Pearson and his staff have been working on the Hope Brook project for some time now with positive results. Said Pearson, “We have gone in there and have done a successful job drilling.” In fact, Castillian Resources has completed an aggressive 36,000 meters of drilling over the last couple of years. This completed drilling resulted in a maiden NI 43-101 resource that was published this past spring. Said Pearson, “We published an update in October.” To date, Pearson and the Castillian Resources team have been pleased with the progress they have made. He said, “We have 590,000 ounces of gold indicated and 549,000 ounces of gold inferred.” The team at Castillian Gold is working to advance the project as soon as possible. Said Pearson, “All of this work is just a start.” In fact, recently the company has started to move forward out of the previously defined mine area into a new target-zone that may offer additional options for development. Pearson said, “This last program was the first time we were actually able to step out of the former mine area. We outlined a terrific near surface target.” The near surface target is located on the southwest side of the mine and is close to the surface. Pearson said, “We were always puzzled that the south side of the mine didn’t have anything near surface in old drilling. The gold mineralization actually starts 50-75 meters below the surface so the old holes missed.”
In addition to excellent results from an aggressive drilling program and a new surface target, Pearson and his team feel that they are working in a mining friendly location of the world. He said, “The other thing we have going for us is that we have a great location.” With the previous owners, the Hope Brook project was left with assets that will become helpful as Castillian Resources advances the project. Said Pearson, “We have electrical power that is already on site and tailing ponds that are in good shape.” In addition, Newfoundland is an excellent place for mining companies to do business. Said Pearson, “We are in an excellent jurisdiction politically. They’d love to see a mine going again.” All of these factors are ones that have put Castillian Resources in a very good situation with their Hope Brook project. Said Pearson, “We are in a very good situation. We have moved the project along.” One area of concern has been the reaction of the market. Though Castillian Resources is moving forward, Pearson doesn’t believe they are getting a fair look from the market. He said, “Like everyone else, we haven’t gotten a lot of love in this market.”
The next steps for the company include continuing to work with the data they have and working with their financing. Said Pearson, “We are busy compiling our data. We will need to raise money for the next drill program” The company recently completed a 5:1 share consolidation so now has a much more favourable capital structure with 67 million shares issued. Their progress is guided by the history of the mine itself. Said Pearson, “It’s driven by the project, which is in an excellent place. It is a substantial resource with excellent potential for further expansion. It has infrastructure to support the mine. I’ve done this before. One of my specialties in my career has been to take old mines and assess their true potential.” No matter the situation, Pearson and his team are moving forward. He said, “Despite the fact that it was a tough year, we keep moving Hope Brook forward. We need one more drill program of 8000 to 9000 meters to get the next major resource update and ultimately, by the end of this year I hope we will be in position to start a PEA.”
With a substantial resource and a management team that specialized in rehabilitating historical mines, Castillian Resources is in an enviable position.
Disclosure
The Alper family owns Castillian Resources stock.
http://www.castillian.ca/
Castillian Resources Corp.
65 Queen St. W., Suite 815 PO Box 75
Toronto, Ontario Canada M5H 2M5
Tel: 416-861-5899
Fax: 416-861-8165
info@castillian.ca