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Mike Page, Director and Former Interim CEO of Stratabound Minerals Corp. (TSXV: SB) Discusses the Reorganization and Merger with Silver Stream Mining Corp. in an Interview with Dr. Allen Alper

on 5/28/2016
Mr. Mike Page, Director and former Interim CEO of Stratabound Minerals Corp. (TSXV: SB) talks about how the turn in market conditions and events revitalized Stratabound and led to its relisting and merger and reorganization with Silver Stream Mining Corp. The current metal prices and good exploration properties in New Brunswick paved the ground for a seventy percent Silver Stream, thirty percent Stratabound merger. With 40 years in the Industry, Mike executes on his substantial expertise in exploration geology for Stratabound Minerals.

Dr. Allen Alper: This is Dr. Allen Alper, Editor-in-chief of Metals News interviewing Mike Page, who is interim CEO of Stratabound Minerals Corp.

Could you tell me what's happening at Stratabound Minerals Corp.? I know you just had an announcement of resumption of trading on the Toronto Venture Exchange and you have undergone a reorganization, could you tell our readers a little bit about what's happening and what the plans are?

Mr. Mike Page: Sure, I would be glad to. You know, recently in the last year, Stratabound struggled like many juniors have in the market. But it had little way of raising money, and back in the very beginning of 2015, the decision was made to actually close the doors of the company. That was announced, but in the meantime a few months later, the company was approached by a group called Silver Stream Mining Corp., and Silver Stream was looking for a company, with which to merge and move forward with their corporate plans to have a listing on the Toronto Venture Exchange. Stratabound is a TSXV listed company, where Silver Stream was a US company that had just gone private.

Discussions moved on and it was realized that there were a lot of synergies. A number of us knew each other and had worked with the other parties before. Silver Stream's philosophy is more about production oriented assets, rather than pure exploration. Stratabound has been involved in production, but it was much more an exploration oriented company. Bringing the two together was a way to help save Stratabound’s shareholder value. Stratabound is well-known in the market place and has a good name; it's past president and past director Stan Stricker is very well regarded. That would do well for Silver Stream. There were a lot of synergies, and it was agreed to do this merger, which was announced last May, with a letter of intent signed. It proceeded slower than we hoped because of regulatory hurdles, but we were able to close the transaction on May 17.

Basically the transaction makes use of and preserves the TSX listing, with Stratabound taking over Silver Stream. Like a merged company, its management is now dominated by executives from Silver Stream. I am involved as a Director and Vice President of Exploration. - I am the only existing Stratabound Director involved with the new entity. Seventy percent Silver Stream, thirty percent Stratabound is the rough ratio. The merged entity has more than four hundred million shares. At our shareholders meeting, we'll seek approval for a three to one rollback, so there will be about 140 million shares outstanding. That's the basic transaction.

Dr. Allen Alper: With all this completed, could you tell our readers what the goals of the company will be, the properties and plans. Terry Byberg is the new president?

Mr. Mike Page: Yes, let me talk a little bit about the management team and the structure of the new board. Basically many of the people, who are involved in both the management and the board, have worked together before on operating mines, mainly in North America, but there's been some activity in South America. They have a very good reputation of operating mines, lowering costs, optimizing operations and successfully executing plans; basically they can deliver it in the real world. I personally think this is a tremendous strength in a market which often has many promises but is very thin on the actual financial delivery. This will have a big influence on our corporate philosophy going forward, which I'll elaborate on. We cover most of the main professions including mining engineering, mineral processing, mine geology, exploration geology and of course corporate administration and regulation.

The management includes Margaret Kent, Chairman of the Board, Terrence Byberg as president and CEO and Richard Meschke as the CFO and in corporate development. The board will consist of Margaret Kent as chairman, Terry Byberg, Mike Robb, Peter Calder and me. We also have other active team members and they cover mineral processing, production geology, and the team has tremendous underground experience as well as open-pit mining. This serves us very well in moving our corporate strategy forward. In fact, a lot of these people actually worked in the operation of the Giant Mine in Yellowknife and the Pamour Gold mine in Timmins, Ontario, and built the Kemess Mine in British Columbia.

The strategy of the company is to look at production or near production investment opportunities in precious metals, gold and silver, base metals covering VMS copper and zinc, copper, lead zinc or manto style high grade lead zinc silver. But probably not porphyry copper, just because of the very high CapEx requirements, never mind the rather poor copper price at least in the near term. We're also considering some industrial minerals opportunities. Peggy and I both have industrial minerals experience. The key criteria are to identify and acquire an operational project that will have a strong financial base. Because what we're interested in is generating sustainable cash flows as well as having mining and exploration upside. That's where the strength of our team is, evaluating opportunities and conducting due diligence to make sure that we move on a project that will be of real benefit to the shareholders.

This market has been one of the tougher ones probably since World War II and many companies are stressed either for financial, technical, management or a combination of the above reasons and it is creating a lot of acquisition opportunities that have very good valuations. You know as they say, it's buy low and sell high and it's that sort of opportunity that we have now and it's probably as good as it will get for the purchase price of assets. The challenge is to find ones that are of real quality and if they have problems, then those assets that are readily fixable in the shortest amount of time possible. That's the way we believe we can bring stability to the company and future value to all our shareholders. Because not only shareholders, but most companies have taken a big hit over the last couple of years, and any kind of merger/takeover often involves dilution, so as management and directors, it's our responsibility to claw back that value for shareholders and to build and expand on that value as much as we can.

The new company is dominated by three large shareholders, the largest is from Stratabound, there're two very large shareholders from Silver Stream and they are all very supportive of the transaction as well as our strategic plans going forward. Really what we're looking for here is to acquire what we call a Keystone project. It's a project that will anchor the company and allow us to be able to grow and expand if other opportunities present themselves in the future.

Dr. Allen Alper: That's great. Would this be in order to acquire a new project that you could put in to production and provide cash flow?

Mr. Mike Page: It's either an existing operation that might still be operating or it might be on care and maintenance. It might require capital and therefore it is stressed right now because of the current market. It might be an advanced exploration program that has a relatively short timeline to development. Often that's a precious metal project that needs lower capital and is a bit quicker to put in production than a base metal project. At the end of the day it has to be a relatively short timeline, within two or three years to get into production, so that often means it has a PEA already done or a Feasibility Study has been completed.

Dr. Allen Alper: Where will your company get the finances to do something like that? Mr. Mike Page: We've made a point to align ourselves with a number of different groups that are specializing in M & A activities particularly in North and South America, as well as individual finance groups. It seems that there is interest in the market place, that there is money available, but that money is being very careful about where it's going. In particular we found the sources of money are looking for highly skilled and experienced groups that can deliver. So many companies and so many projects were on the boil in recent years when things were very exciting with high metal prices. But the number of groups that can actually execute a development plan and build a financially stable, profit-making company is limited.

Dr. Allen Alper: I noticed that you have an extremely exceptional background. Could you tell our readers a bit about your own personal background?

Mr. Mike Page: Yes, I guess I've been around the block a few times. I have more than forty years in the business. I spent some sixteen years in Australia working for the fourth biggest nickel company in the world at that time, Western Mining Corporation which was eventually taken over by BHP Billiton much later. I have an exploration background, I am a geologist, but I spent many years developing and running geological research labs for Western Mining Corporation. I have a strong background in mineralogy and metallurgy. For many years I was a trouble shooter for plants, smelters, uranium projects, gold mines that sort of thing. I eventually ended up working in West Africa. With Golden Shamrock Mines, we conducted gold exploration throughout West Africa, Ghana, Guinea, Mali, and Burkina. The group I was with discovered and drove the Siguiri Gold Deposit, which I think is about five million ounces; it's now owned by Anglogold Ashanti and is a big heap leach operation in Guinea.

I eventually tied up with Robert Friedman's group and ran exploration for one of his Chinese subsidiaries for a number of years and then exploration in South Africa, Democratic Republic of Congo, and Zambia for a short period of time. Then I was hired by Norilsk Nickel as the Director of Geology, so I was the first Western Geologist and one of the few westerners to work in the company, so that was a unique experience and opportunity. I worked in Russia almost permanently for four years. Then I was involved in a lot of M & A work since the 2008 crisis that created many opportunities, so I have lots of M & A experience.

Dr. Allen Alper: Well I can see why financiers, merger and acquisition people would have confidence in your team and think of financing projects that your group will bring forward. Your other team members have strong backgrounds too.

Mr. Mike Page: Yeah, absolutely. The other team members have even more experience, particularly Margaret Kent who has tremendous experience not only in acquisitions but in the capital markets as well. And I think in this sort of market environment, people are looking for the practical side of the business, not just the euphoria. You have to be able to translate the euphoria into hard earned dollars and make an opportunity into a viable business. There are great ideas out there and great opportunities, but many teams really are not business oriented and that's very much what we are on a practical level.

Dr. Allen Alper: That's great. Would you give me some of the reasons why our readers and investors should invest in your company?

Mr. Mike Page: Well I think the group we have put together, and let's call it the new Stratabound, is a proven, experienced mining group with a track record of operational execution and in particular, cost reduction. I have been impressed by this group’s practical understanding of how to run a viable, but rather, lean, mean operating machine. Often when we're looking at companies we find that they have an awful lot of fat and a lot of it is unnecessary.

You know the corporate business philosophy of our new company will be quite different from the old Stratabound that people and investors knew. But I think the new strategy will significantly improve shareholder value by being based on strong cash flows and good upside potential. Taking this into account, I think with very cheap asset valuations in the current market, investors are going to have very good opportunities with us. The time to invest is the bottom of the market, and it probably won't get any better than now. The place to invest is really with the right group of people, with the right assets. Our shareholders, with whom I've talked, believe that that's what we have here now.

Dr. Allen Alper: That sounds right. What do you think the timetable will be going forward?

Mr. Mike Page: Well, the reorganization deal is done and now we are focusing on an acquisition of an asset. I'd say probably within three to six months, maybe sooner, you’ll see news about that. We are working on several opportunities. But, the devil’s in the details. In this business you do not analyze things only by computers and fancy Power Point presentations, you have to get down and dirty, you have to go underground or in the open pit. You have to do sampling. It's a very hands on business and the due diligence process is very hands on in order to determine real confidence. You have to be able to interrogate block models, computer block models of resources. You have to be able to interrogate financial models, and really the only way to do that is to be hands on, so that takes time. I think shareholders would be happy that we go at a speed that fits the target asset and our confidence in that asset and that will take some time.

Dr. Allen Alper: Okay, sounds like you have a very good plan, an excellent team and good connections with the right financing group, people who could support the acquisition. Sounds like you and your friends are ready to build the next mid-tier company. Sounds like everything is weighted out very logically. People are going to be very interested in looking at investing in your new stock.

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