Magnetic Resources (ASX: MAU): Exploring Hawk’s Nest Nine Gold Project, in the World-Class Laverton Gold Region, Western Australia; George Sakalidis, Managing Director Interviewed
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By Dr. Allen Alper, PhD Economic Geology and Petrology, Columbia University, NYC, USA
on 3/12/2021
Magnetic Resources (ASX: MAU) is focused on discovering significant ore bodies, which offer viable commercial offtakes. These discoveries are made primarily utilizing the team's unique set of skills in ground magnetics and soil geochemistry. We learned from George Sakalidis, Managing Director of Magnetic Resources, that they have been actively exploring a gold project called Hawk's Nest Nine, located in the world-class Laverton gold region, in Western Australia. Magnetic’s Hawks Nest tenements are only 15km north of the Wallaby deposit, 35km north of the Sunrise Dam deposit and 10km NW of the Jupiter deposit– multiple mills provide potential for toll treatment and M&A interest.
Magnetic Resources
Dr. Allen Alper: This is Dr. Allen Alper, Editor-in-Chief of Metals News, talking with George Sakalidis, who is Managing Director of Magnetic Resources, NL. George, could you give our readers/investors an overview of your Company and what differentiates your Company from others?
George Sakalidis: Yes. Magnetic Resources listed in 2007 and over the last three and a half years, we have been actively exploring a gold project, called Hawk's Nest Nine. The Company itself has a very tight structure. There are only 216 million shares, which is unusual for a Company that has been listed since 2007. Our shareholders, the top 20 have 78% and the top four have 45%. It is a very tightly held stock! Many high-net-worth investors are involved with the stock. Mostly, we have long-term investors, who like what we have been doing.
But it's all about the project, and the project's done extremely well. It's three kilometers long. It outcrops, it comes to surface and dips only 20 degrees to the East, so it's very easy for potential cheaper-cost mining in the future. The length of it suggests there will be considerable results there. Unusually, it's right next door to two operating mines. One mine, 10 kilometers away, is owned by a Company called Dacian, who has the Jupiter mine and processing plant. The other mine called Wallaby is 15 kilometers away and owned by Gold Fields, who process their material at the Granny Smith plant, but there's a third company, 35 kilometers away, Anglo Ashanti who own the Subrise Dam Mine.
The last two Companies are very large, market-capitalized companies. All three Companies are very keen on potentially doing something with us because they all need ore for their hungry mills. So, we are very actively drilling away. By probably the middle of this month, we will have completed close to 70,000 meters of drilling at Hawk's Nest Mine and the adjacent Lady Julie project. It looks like the system we are drilling, even though we've only been drilling on average down to 55 meters depth, has a deposit with huge depth potential, and the depth potential is important for increasing resource size.
That has shown up on a shallow seismic survey, which has revealed what we call these thrust zones. Thrust zones come from great depth and bring up the gold. The area that we are finding, Hawk's Nest Nine, actually sits on one of the thrust faults. And there are another five of these, which we have not explored. So, it looks very interesting, and the upside looks pretty good.
Dr. Allen Alper: Well, that sounds excellent. Could you give us more details about the project?
George Sakalidis: Okay. The Hawk's Nest Nine project is an area about 20 kilometers south of Laverton, in Western Australia. Laverton's about 300 kilometers north of Kalgoorlie. Kalgoorlie is probably one of the biggest gold mining centers in Australia. Laverton is probably the second in size, in WA, for the gold inventory, second to Kalgoorlie. There are over 30 million ounces being mined in this region, currently and historically.
Two of the adjacent mines, Wallaby Mine, owned by Gold Fields, is seven million ounces, which is world-class standard. And to the south, a mine owned by Anglo Ashanti, called Sunrise Dam, is 10 million ounces. That's the sort of prize we're after. We've been exploring this for three years, with very detailed RC drilling. The metallurgical results are excellent. Very high recoveries, probably 93% was the average. Everything looks quite favorable for any potential mining. And we have very strong interests from our neighbors, with the operating mines and processing centers.
Dr. Allen Alper: That sounds excellent. Could you tell us more about your capital structure?
George Sakalidis: Yes. There are 216 million ordinary shares. There are about 20 million contributing shares and about 10 million options. The shares and the contributing shares are listed, and they are traded on the market. The market capitalization is about 350 million. It's quite high, but at the same time, we have very good results to demonstrate.
Dr. Allen Alper: That sounds very good. Could you tell us about your background and your Team, George?
George Sakalidis: I am a geophysicist. I have been a Company Director of listed companies since 2000, so 21 years. I have listed various companies, probably five companies in total. I have found a lot of different mines. This Hawk's Nest Nine Deposit looks like it is going to be another one. I found the Dongara mineral sand mine, and also the Boonanarring mine, which is currently being mined by a company called Image Resources. They have all been found, using my geophysical techniques. I'm hoping Hawk's Nest Nine will turn into a mine as well. So, I have a bit of a background in discovery.
Dr. Allen Alper: Could you tell us more about the other Members of your Team?
George Sakalidis: Okay. There's an experienced Director called Julian Sanderson, he lives near Perth and he's an accountant by trade. He's retired, but he's on the Board. We have two Directors from Singapore. One of those, Eric Lim, is a Director of the UOB bank there, and the other Mr Chan one is a big investor, who is our biggest shareholder. These guys are very experienced in their own areas and they also support the Board. We do have a number of large Singaporean shareholders. It's good to have them. We haven't been able to travel there very much lately, but we connect using conference calling and Zooming.
Dr. Allen Alper: Well, it sounds like you have a strong Team, and you have a great background. Could you tell our readers/investors your primary goals are for 2021?
George Sakalidis: 2021 will be a very busy year. We are mainly finishing this large drilling program, which started in early January, a 20,000-meter program. Once we have finished that, now that we have our new seismic data, the final interpretations of which are happening right now. That will allow us to start drilling deeper holes. The deeper holes are where the big resource size comes from, because most of the large deposits plunge downwards and can be up to two kilometers in depth. We are hoping our deeper drilling will demonstrate that. We believe it probably will, mainly because of these big thrust zones that we mentioned before.
Once we have completed that deeper drilling, there'll be a resource study, by an independent geologist, plus a scoping study. That will give us the economics of what we have. That will be of great interest to us and also to our neighbors. They are very keen on having our information, so they can do their own numbers and come back to us in terms of interest in what we are doing. So that's potential for M&A.
Thirdly, we will be beginning our pre-feasibility study probably later on in the year. It will be a very busy, busy year, doing a number of different studies to progress the project towards production.
Dr. Allen Alper: It sounds like 2021 will be a very important year for Magnetic Resources and an exciting time for your shareholders and stakeholders.
George Sakalidis: Yes, yes, it will be. I am looking forward to the deeper drilling and understanding the potential size of what we're dealing with. It is unusual to have something three kilometers long. That's probably the length of some of these other world-class deposits around Laverton. So we're hoping Hawk's Nest Nine turns into one of those.
Dr. Allen Alper: That sounds excellent! Could you tell our readers/investors, George, the primary reasons they should consider investing in Magnetic Resources?
George Sakalidis: We started two and a half years ago at around 12 cents. Currently we are around $1.50. There is a strong upside, mainly because of the size of what we expect to find. A lot of our peers, the bigger market capitalization companies, once they have identified these large resources, their share prices are much higher, and their market caps are much higher than ours. So, we do expect some strong upside on the back of the results that we will have from this work that we are doing over the next few months, with the deeper drilling and all the other studies we are doing.
Dr. Allen Alper: Those sound like very strong reasons to consider investing in Magnetic Resources, George. Is there anything else you would like to add?
George Sakalidis: Doing shallow seismic, is unusual for a company that is not in production. Normally it's done by the companies that are in production to understand the depth and the extensions of their own known deposits.
We were compelled to do it, mainly because of the size of what we found. That's why we've completed this survey. So you can see that we're pretty bullish to commission a seismic survey, because they're not cheap to run. But at the same time, the results that they generate are almost impossible to get from doing drilling near surface. So, I think that is more of a technical area, but that certainly gives you a bit of an idea of why we are proceeding with some of these studies.
Dr. Allen Alper: Well, that sounds excellent! And it is excellent that you, your team and your key investors are invested in your Company. It shows you have confidence in its success and are aligned with other investors.
George Sakalidis: Thanks Al.
Dr. Allen Alper: We will publish your press releases as they come out so our readers/investors can follow your progress.
https://magres.com.au/
George Sakalidis
Managing Director
Phone (08) 9226 1777
Mobile 0411 640 337
Email george@magres.com.au
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