Automated transcript · Written by software from the replay's audio. It can mishear names and figures; the replay is the record.
0:41 This is really just an extension of kind of the previous webinars that we've done. Just really an update as to, you know, kind of where we are and and how things are are looking at this stage, but also kind of where we're going for the remainder of the year and into next year. I draw everyone's attention to the forward-looking statements and disclaimers, and they are on our website and please review them. As everyone may know who's been following the story, this is an interesting asset and it's an interesting project. We are in a very low risk jurisdiction of Ontario and this is one of, if not the lowest risk jurisdictions when it comes to geopolitical risk.
1:30 We have a 4 million ounce historical resource with a 40 kilometer, 25 hectare, 40 kilometer toe-to-toe land package with a known 20 kilometer mineralized trend on the project. So we have quite a substantially large land package. We have historically, there's been about 150,000 meters drilled on the property, and we are embarking on our own 100,000 meter drill program to increase the size and scale and quantity and quality of the resource for future economic studies we're going to do that I'll speak to. The company is driven by an extremely driven group of management board and advisory board and please refer to them. I no longer put them at the front of the presentation but please go to our website and familiarize yourself with them. This is the who's who of mining in Canada and this is a very very strong group.
2:30 People have asked me why such a strong group etc. And the quality of the people is reminiscent of kind of the quality of the project and the success of the project And my aim is to use this large group of people to expand the network and awareness of GoldShore to as far a reaches as we can, hence the group of people involved. And I'm gonna talk a little later on about a historical PEA, preliminary economic analysis that was done back in 2013. And it was updated in 2020 by West Elm Gold Mines. We acquired the project from West Elm Gold Mines back in January of this year for $52.5 million.
3:19 That was the headline number. And subsequent to that in February of 21, we put together a $25 million financing to support the development of the project. Project came on into the capital markets on June the 4th after being approved by the TSX and we've been trading since June the 4th. As we know, the market has gone, you know, quite quite sideways and in some cases pulled back significantly throughout the summer months in July and August and even into September. So we've had very, very difficult trading environment and very, very difficult gold price environment during our first few months of listing. But I think all that's about to change.
4:05 This is where the project is. It's in Northwestern Ontario. And it's in the same kind of area as many other projects very similar to us. And I can Kirkland Lakes, detour Lake Gold Project as something very similar to Moss Lake, where Moss Lake is today. Detour was once in that kind of position. And as well, Kote Lake and Rainy River to a lesser degree. But the takeaway is this, this is a low grade, 1 gram deposition. This is bulk tonnage, open pit, but it is low grade. And make no mistake about it. But what this really is, is a leveraged play to the gold price. And if people think that gold's going to continue to trade around $1,800 and up, and my view is still, you know, we're going to trade between $1,800 and $2,200 for this foreseeable future, then this is a very strong leveraged play to the gold price, as is all the others on this list as well.
5:11 There's been a lot of history and a lot of development work over the years at Moss Lake. As I've said, there's been about 140,000 to 150,000 meters of drilling previously done on the land package. And there has been a historical copper mine that operated in the 80s and closed in 92. That was operated by Naranda and closed by Xstrata. In 2013, Moss Lake did their PEA. And after that in 2014, West Dome earned into the project and continued on with some further exploration drilling into 16 and 17 before updating the PEA in 2020 and looking to divest themselves of the project in order to have someone develop it. This is our resource statement. We've got about 1 million and a half ounces and indicated about 2.5 million ounces inferred.
6:02 And what we're going to be doing through our 100,000 meter program is looking to increase the quality and quantity of the resource at Moss Lake. This is our land package, toe to toe. It's about 40 kilometers long. The white dotted line is the known mineralized trend where historic drilling has gone on. Some people have said, well, why is the resource not extend beyond those boundaries of where we are at Moss Lake? And the realization is there's just simply not enough drilling out in the outlying step out areas and outlying strike of Moss Lake in order to pull it into the resource. Our job is going to be to step it out. It is gonna be to step it out laterally and it will be to step it down at vertical depth. But there are 3 different styles of deposits on our land package. Down in Hamlin Lake, we feel that there's an IOCG style deposit.
6:55 I walked this with Pete Flindell a couple of weeks ago when I was up at site with our board and very, very compelling, Lots of kind of outcrop Malachite, you know, it's nice, pretty green color. And it's, although it's not drill ready, we wanna get this drill ready for the spring and early summer so we can start testing this target. Iris and Cold Stream, again, North Cold Stream being the historical mine. And, you know, again, these are targets that are, that need to be tested. In addition to our focus and our focus is obviously on Moss Lake. I think what we're going to see over the foreseeable future as we start to put out our drill results from the 100,000 meter program is much more of the same. We're going to see a gram, we're going to see 1.3, 1.5, we're going to see about a gram and change over long intercepts, 150,160,180,200 meters. And this is what we've seen historically in these sections.
7:56 And I think once we get down into Hamelin or up into Cold Stream and Iris, We're gonna see some unpredictable grade. We're gonna see some unpredictable grade at certainly up in the VMS deposit, up near Cold Stream. And we will also be testing all of these targets, including Moss Lake, with a multi-suite element assay. We're going to be testing for copper silver, sorry, gold silver, but we're also going to be testing for copper, lead, zinc, moly. And I think we need to get a better understanding of kind of what's going on in all of these areas. The more information, the more data, the more educated decisions that we can make to guide our drilling and to guide the development of this project.
8:44 As I've historically said and continue to say, this deposit is quite under drilled. It is your typical junior drill down 200,250,280 meters and you hang a resource together and then you look for an exit. And this is what Moss Lake Gold Mines did. They drilled, they got results into the market, they raised some money, they did it again. And eventually there was enough critical mass that West Elm were very interested in inventorying those ounces and using it as option play for the future. Back in 2014, 15, this was probably not economic or economic to get anyone's attention, but it's certainly economic in today's numbers.
9:31 One of the things I also like to do is de-risk a project metallurgically. I like to do metallurgical testing to better understand, you know, with a greater degree of accuracy what the recoveries are going to be from, you know, what the predictable recoveries are going to be. So we'll be doing quite an extensive amount of testing through the winter and spring and summer of next year in order to get a better handle on this. And part of the value creation on this will be, we hope to increase our recoveries to kind of 90, 95%. So there's 10 or 15% of recoveries that are gonna go straight to the economics when we go to update them. We have some of the first maps back. I don't have them all in the presentation but we have some of the first maps back from our V10 survey in the spring illustrating kind of the high mags and low mags and I think it validates you know how Moss Lake and where Moss Lake is mineralized along this corridor and along this fault system and and backed up against some banded iron formations.
10:34 I think what we see here is significant potential to increase the size of Moss Lake where it is and where it is laterally. And by expanding it laterally and along strike, but by expanding laterally, it'll allow us to go much deeper with our potential pitch shell when we go to hang this together in an updated PEA. And the second takeaway for everyone is, you know, there are strong, strong mag highs here at Hamelin and Coldstream. When we get the balance of the mag inversion maps and diagrams, and we start to put together slices vertically down into the ground, I think we're gonna get a really good idea of whether this is going to materialize into a standalone copper project.
11:24 And if so, then is there the option for a copper spinout? And I can't answer that right now, but I'm pretty optimistic. And once we get these tested, we'll be able to make that determination but this is an excellent start with some high-grade copper prospects kind of that lie on this major terrain boundary. As you can see we let the first couple holes run we wanted to see what's going on down below the resource this yellow blob that looks like a continent is the existing resource and we have significant mineralization down below it and I've had you know certainly people say well your mineralization goes down 600 meters. You're never gonna have a 600 meter pit.
12:09 And my response to that is, I wouldn't be too sure about that. If we can get lateral extensions to the pit shell, we can certainly go down 600 meters and I look at Detour Lakes Life of Mine plan has 850 meter pit depth at end of mine. So not uncommon. I've worked on a number of projects that had pits deeper than 600 meters. So it's not uncommon. And this will, along with the lateral extensions to the right of this, underneath the blue line and beyond, and it will allow us to go deeper. And it will keep the strip ratio at a manageable level so that we don't blow out the economics in capex, moving waste and or throughout the life of mine by moving waste. So you can see there is some significant mineralization certainly near surface and also at depth.
13:03 We leave this in here because I think it's quite important. We started out with nothing. And in a very short period of time, we were able to build enough capacity to hold about 30 people in our camp. We built a core shack where we cut and process samples. We log core, we can log up to 400 meters a day, which is the equivalent of what 4 rigs are gonna produce in a day. We have bulk density sampling, photography, we have core photography, we're looking into core scanning. So I think, you know, we're well set up to handle what we're doing, and we just need to kind of continue to ramp up. We've got 2 rigs running now, and we hope to get this to 4 rigs by the end of the month. Again, I'm very, very outspoken about, you know, our relationships, both with our people, but also with our host communities, our Indigenous representatives and our First Nations communities.
13:59 And we are well advanced into entering into an MOU with our host communities. And I think this goes a long way to, continuing with the credibility that we've earned early on in this process. And the recognize, recognizing and including our host communities in our decision-making process when it comes to contractors, when it comes to, you know, we use an indigenous affiliated consultant to conduct our baseline study. And again, these are all, you know, value creating activities. This is the drill program for the next several quarters and leading us up to the end of the program of 100,000 meters. We've identified work that needs to go on beyond that.
14:49 And I think this is kind of indicative. I would love to bring forward some of the drilling at Cold Stream Hamelin, some of the Gen X drilling, because this is going to expedite a potential understanding and maybe a decision to spin out the copper project into. Maybe we're sitting here next year talking about Copper Shore resources, who knows, but that's a free option for the Gold Shore shareholders and that is something I think that is quite exciting and quite compelling. We will get through our program kind of in the summer of next year and towards the end of the summer. I expect in kind of September, October, we'll be updating the resource estimate while we carry on with some maybe some geotech drilling and some other infill drilling.
15:35 And then we'll look to update the PEA in by the end of the year. When we look at kind of valuations and I'm, you know, this is kind of what I do, but in my background in being very M&A focused and very transactional, I try to get a very good understanding of what projects are worth, both in the current environment, both in prevailing environments going forward. And the Moss Lake PEA from 2013 had significant capex. It had $750 million capex. And when West Dome updated that, the capex grew to close to 1 billion dollars. And I think, you know, it started to lay the framework for what I would classify Moss Lake as, as an early stage tier 1 project.
16:28 Tier 1 project being 10 million ounces, 10 year plus mine life, plus upside, and a production profile of 500,000 ounces for mine life. And I think we're starting to get close to that. We've got 3, in the update PEA, it's got 3 million ounces contained, 2.5 of output based on 80, 85% recoveries. But it only shows 15,000 tons of processing through the plant. And I see this expanding quite a bit. And the cash costs are kind of lower half, again, tier 1 companies have cash costs in the lower half of the curve. And this is well under the average, probably in the 3rd or 4th quartile of me being a lowest cost producer of around $922 per ounce of production with peak years of 350 to 400,000 ounces. So this is the framework of what this project started, is going to start with.
17:38 This is what we acquired. These are the economics that we acquired. And when you look at valuation metrics, these types of companies trade at kind of 0.3 times NPV. And the NPV of this project, 5% pre-tax is 1 billion dollars and after taxes about $600 million. So trading metrics of about 0.3 times NPV, This illustrates a potential market cap of 180 to $300 million. That's on what we acquired. This is on the 4 million ounce resource. This is on 3 million ounce input into Moss Lake, into the PEA. So this is one heck of a starting point. We're trading at 60 to $65 million market cap today.
18:26 This indication gives almost 3 to 4 to 5 times that. Another trading metric is how we compare to our peers on a per ounce basis. And again, we are still well behind the curve. And there's a little dated, it shows a $57 million market cap, and we're trading up the last few days up to 62, 63 today, but still at 15, $15.5 an ounce, we are 3 times below the mean, 3 times below the average of $50. So there's a lot of room to grow to what some would call re-rating, I call calibration to our market. Because the macroeconomic picture for gold, I think has never been better in the last 5 years. And I think going forward, we're gonna start to feel some of that wind in the gold price sale.
19:19 I really thought this time last year we would have felt it throughout 2021. We didn't. And quite frankly, and quite frankly, we had a summer where the market just went to sleep. They went on holiday, liquidity dried up, our share price pulled back, gold price pulled back, and quite frankly, the whole market was quite, it couldn't find its feet. And then entering September, I started a campaign of awareness again, as I did through the summer. Excuse me. But I started to hit the conferences in Beaver Creek, Denver, the Vegas Money Show, And it was literally a ghost town. There was hardly any attendance.
20:04 There was very little capital ready to deploy. But the thing was, there was a lot of capital out there. There's a lot of capital to deploy. People were sitting on it and waiting for this to break. Now, it didn't break in September. It actually got worse. It pulled back to 1760, gold did. And our share price pulled back dramatically as did a lot of gold equities, most of them did. You look at a lot of the majors and mid-tiers trading at kind of 52 week lows are not far from it as we are. Today, we're a little higher. We've bumped up to 67 cents I see just now. Thanks for that, Kevin. But this is not a kind of a micro picture. This is a macro play. A few cents here and there, that's great.
20:51 And it's starting to show some really good momentum. But this is an equity play that I still feel is highly leveraged to the gold price. And quite frankly, I think that we should be trading kind of, you know, actually maybe multiples of 67 cents. So when things normalize, when we get this wind in our sails in gold, you know, I would look to who is going to move the fastest, who is going to calibrate the fastest, who is going to calibrate the furthest. And I think this is why sitting at the bottom of this chart, I think it gives us a bit of an advantage. We're probably going to accrete more than the average gold equity simply because we're starting from a pretty low base.
21:36 And we have a very, very encouraging and dramatic story. That story is not about geological risk. That story is not about geopolitical risk. That story is about execution risk. We need to get through our program, demonstrate this is a real project, demonstrate the quantum increase in ounces, the quality increase in ounces, put a real project together and show that with a form of data that is to a standard that a mid-tier or major would accept and build on. And that is kind of what our program looks like. There's been a number of transactions of these types of low-grade 1 gram deposits. And this is another metric. So you've got project economics, how is your valuation compared to that? You've got peer comparables, trading comparables, where does everybody else trade with a like for like risk profile?
22:30 Where do they trade on a per ounce basis? And the last one is where do companies like us transact when they hit the finish line? And you can see transactions that have occurred anywhere from 70, $80 kind of being in the middle. You know, Rainy River, $36, it was still a $300 million deal. However, a little premature. I think Kote Lake and Trelawney, when they came together with Sumitomo and IAMGOLD, they had 10 million ounces. That's our goal at the end of the day, to have 10 million ounces, or at least show a path to 10 and beyond 10 million ounces because adding ounces to your statement is a function of drilling, it's a function of spacing and that is just really execution risk. I look at Detour And I get it.
23:17 They transacted with 20 million ounces, not 10 million ounces. And they were awarded a very, very significant premium because of the size potential. Do I think Moss Lake has that size potential? I don't have an answer for that, but I do know one thing. It's one heck of a lot bigger than 4 million ounces, and we just need to prove it. I'm gonna talk about the cap structure for a bit because I think it does speak to kind of the trading environment. And I have to caveat this, this slide is dated. Because last week, I had a discussion with our broker, and my view is that you raise money when it's available within reason. You don't raise money when you need it.
31:12 to the CapEx, we're going to do the same to OpEx. And then obviously, there was a big, big delta on FX because the US dollar powered up after 2013 being a par with Canada. And yes, the CAPEX went up to around 900, don't quote me, around $900 million Canadian because a lot of the CapEx would be in Canadian dollars, but the NPV rose up to 1 billion dollars because a lot of the revenue is in US dollars. So That's the same dynamic we're going to have when we get through our PEA. But this is not a small scale project. This is gonna be, well, I think when we're done, this is going to be somewhere around 1 billion 4, something like that, billion 4 billion 5.
32:00 Even if we double the resource, even if we triple the resource, there are limitations on building the project and building kind of the size of operation. If we wanna try and gear this up to 40,000 tons a day of processing and 60, 70,000 tons of mining, there are some limitations as to kind of where how big we're going to be able to make it because you don't want a big cap out X blowout. You want to optimize the return and yes always have that 10-year kind of mine life outlook But beyond that is discounted to 0. We just need to show a path that there's more there. And I think we focus on the first 10 years. So I think this is gonna be an optimization exercise, both on CapEx, OpEx, and then delivering on the economics from there.
32:48 Great, thanks for that, Brett. Follow-up question from Rainer. You have an impressive board of 9 people and an advisory board of 8, as you've just touched on, but what does this cost per year? Well, it costs everybody a lot of money to get into this, including myself. And I'm not shy and I'm very open about this. I'll have 1 million dollars personally invested into this company by the time we transact. It's because I buy through all the placements. I just see this as a great opportunity. So yeah, and everybody else had to do the same to join the kind of the Gold Shore Advisory Club. We don't pay these guys anything. Yes, they were granted options, normal granting of options as junior mining companies do.
33:34 And that was, you know, and it was, you know, very defensible and standard throughout our industry. And that's what they adopted. Will we remunerate our board in the future? You know, That's a decision for the board. That's a decision for our compensation committee. But I'll tell you one thing, I've got good value out of these guys in the last 8 months. And certainly since we've been listed in the last 4, they bring me ideas, They bring me investors, they bring me lots of opportunity to get the awareness out there. And when we have a group of men and ladies who some of them are quite young and very adaptable in this marketplace to things like social media and I'm very active in those in those mediums.
34:22 Old school guys like me with gray hair and others with possibly gray hair or no hair, we do things a little bit more formal although we are bringing those platforms and those mediums in to get the awareness out there. So this is not a silver bullet approach. This is a whole bunch of scattered bullets around in order to kind of affect the message and get the message out there on a number of fronts. And this group of guys has been very, very, and ladies have been very, very helpful to do that. Great, thanks for that, Brett. Russell in the audience asks, at your copper potential targets, will the precious metal credit make the economics of mining doable if the copper grade is low? Yeah, I think we still have to understand it. If you look at Hamlin, you've got kind of 0.9 grams and 0.35% copper over a significant intercept, 150 meters. So I think, you know, if we can get through, say 5 to 10,000 meters at Hamelin, 5 to 10,000 meters up in Cold Stream and Iris, we'll get a better indication of whether this is going to be standalone as a copper company, first of all.
35:32 What we turn around in the assays, whether it's copper, lead, zinc, moly, whether there's gold, whether there's silver, and same at Moss Lake, we're going to assay for silver because it's never been assayed for silver. I think all of these byproducts will stack up, and we'll know whether these are copper projects or whether they're with a gold byproduct or whether they're gold projects with a copper byproduct. And I don't know the answer to that yet, but I strongly suspect that Hamlin and Coldstream are copper projects with a gold byproduct. And Moss Lake may have a silver byproduct, but we'll see. Okay, great. Thanks for that. We have plenty of time left, so I'd like to remind everyone in the audience that if you do have questions, you can still ask them in the Q&A chat. But Rich or Brett, maybe you could leave us with some closing marks and talk about what's coming up in the future, in the near future.
36:27 But otherwise, if we run out of questions, we'll be wrapping up for today. No, I'm happy to. You know, I think the news flow, what the catalysts are gonna be over the next little while are quite simple. Most of it's gonna be really boring. It's gonna be boring from the standpoint, we're gonna be telling the market much of the same. Moss Lake is a 1 gram plus deposit. It's long, it's deep, it's lateral, and we're going to just be proving that. And that's what we have to do. We have to take this historical resource. We have to validate it. We have to add to it. We have to infill it to increase the quality. So we have to do all these things and we will be. And then I think the exciting parts are when we start to look, when we start to step out. And I don't think we're gonna step out of Moss Lake and find anything different. I think we're just gonna find more of the same. And that is boring, but it's also pretty exciting from the standpoint that, you know, it validates what we all saw of this project from the very beginning. And let's face it, I think it's what Westdome saw. Westdome saw the size and scale of this and even for a 1.5 billion dollar company, I think it fell outside of their bandwidth to say, you know what, if we're going to develop this, we better do it right. And then it's like, well, you know, maybe we shouldn't do this. Maybe we should just hold it as an investment and look at investment options where we can get full exposure to the gold price on this project, full exposure to the project development.
37:55 So, you know, West Elm have, they will, at the end of the day, they will have 40 million shares of gold short between now and the next 4 years, 3 years now, we've lost a year, but so they will say well 40 million shares and having a position where If that was originally, if that was cash, that would have been one thing, but I think they wanted exposure to the gold price and this gives them exposure. And If we can do that for them and for our investors, I think they will stick around to the finish line. They will see a liquidity event and that's what it's about for them.
38:43 Right. Well, Brett, Thank you so much for coming on today. And I'd also like to thank everyone in attendance and for those who submitted any questions. If you didn't get a chance to get your question answered or if you think of one afterwards, we'll be sending our short survey where you can leave your contact information and the GoldShore Resources team can reach out to you directly. You can also find more information, of course, at GoldShoreResources.com. And, Brett, unless you have any truly final words, I think we're going to be done for today. No, I really do. Thanks, Cam. I really want to thank everyone for listening. It's a big crowd today. And we look forward to kind of having the next summit. Probably, I think we're going to update the market, probably not before Christmas, but maybe very early in the new year as things start to get rolling for 2022. And I'm looking forward to it. Wonderful, well thank you so much again and everyone have a good rest of your day. Thanks everyone.
