Harvest Gold: Why Now? With CEO Rick Mark and Director Pat Donnelly  

0:04 I will say good afternoon, good evening, depending on where in the world you're signing in from today. Thank you so much for joining us today. I've got Rick Mark, CEO of Harvest Gold and Pat Donnelly, who, among other roles, such as VP of Capital Markets for Tudor Gold, is the independent lead director at Harvest Gold. Gentlemen, great to see you both today. Thanks, Romeo. Thanks for having us on, Romeo. Oh, absolutely. So here's how the event's going to go, just for the folks in the room. We'll be a pretty quick one with me asking Pat and Rick a few questions about their experience and the future of the company, really trying to get to the answer of why now for Harvest Gold. But this is an interactive event, so I'm happy to take questions from the live audience. You can enter them in that chat button on the bottom right-hand of your screen at any point during today's event. If they're directly on topic, I'll try to weave them into the conversation. Otherwise, I'll make sure we try to get to them at the end. If for whatever reason, either we don't get to your question, for whatever reason, we run out of time, I'll make sure that Rick gets it so that he'll be able to answer it as soon as possible, particularly if you left your phone number when you registered for the event.

1:01 But if you're like me and you think of the perfect question 1 second after the event ends and you can't anymore, please still feel free to email in and I'll make sure those questions get to Rick or you can reach out to them directly. One last piece of housekeeping. Today's event is being recorded and will be available likely last thing today, Eastern time, it's around 05:00, just before people wrap for the day. I'll come right in your inbox. You can feel free to share it at any time. It'll also be available on our YouTube channel. But that's enough out of the housekeeping. I did want to throw it first to Rick. Now, I know we've got Pat on, and I do have a couple of questions to grill him with. But I'm curious your perspective on how you think you and Pat complement each other in terms of expertise and approach to building value. Thanks, Romeo. Well, it's a great story, Pat. And I first met 15 years ago when I was running VMS Ventures and he was working at Salmon Partners in Toronto on the other side of the fence.

1:54 And he came to know me representing our company that had made a significant discovery in Manitoba.

2:01 And we had a very good relationship in those days, mostly I think because I learned that Pat was a geologist. And so while I was meeting all kinds of financiers, it was really good to speak to somebody who understood what we'd accomplished geologically. That led many years later to Len Brownlee introducing Pat and I again, and I suggested Pat join Harvest Gold. And I think that was about 7 or 8 years ago. So We really lean on Pat because he is the geologist on the board. When I have an important meeting with investors, I always want Pat beside me because I think as you'll find out, he understands all the goings on of the junior company from my side of the business as a CEO of the business.

2:51 There's very few that are talented on both sides of the business and Pat is. He's a tremendous geologist. I find he's one of those guys that asks the right questions and always provides from my point of view for Harvest, the right answers. So I'm just delighted that Pat has hung in there with me on these adventures and it's been a lot of fun. Awesome. Now, Pat, you gotta live up to Rick's hype right away. So that's your first mission. Yeah, I'm blushing right now. My head's swelling.

3:22 That's mission 1 today. But I'm going to ask you a number of questions, some about Harvest Gold, and then we'll work in some questions about the market. I think we're in an interesting time right now and also about your experience. This is going to be a bit of a grilling, but bear with me. Sure, fire away. Perfect. So the first one, as a geologist by training, what about HarvestGold's technical program? Like which aspects are most exciting you? What do you get excited when you look at? You know, one thing I learned a long time ago, and it even goes back to my undergraduate days in geology school,

3:54 there's 1 saying in mining is you want to have a project within, near the shadow of a headframe. And where we are in Quebec, you know, Quebec's a great jurisdiction. And, you know, we're within the, you know, the shadow of the Windfall Lake deposit, which is now owned by Goldfields. And so, what I really like is the fact that, it has all similar geological and structural attributes of windfall in a jurisdiction that's very, very well known. And we were just talking to a possible investor about an hour ago, and Quebec is very cheap to work in. Our drilling costs could be what, Rick? $300 a meter all in? 200.

4:47 200,200 Canadian. So you want to be in a mature mining district. You want to be in an area where there's world-class mineral deposits and you want to have infrastructure. You want to have a friendly government. And so that's why we've, Harvest Gold, I've been around for 7 or 8 years. We've had a number of projects, but when we decide to pivot to the next project,

5:12 I think going to Quebec was a good decision just because of the history of discoveries there and the very, very positive environment. Awesome. I know, I've worked with mining investors for a while now and I know the question they always ask and I'm curious to shoot it right to you. Which is looking at Harvest Gold's current projects, What's up next? What milestones are you most excited about in the coming year?

5:36 Yeah, we've only acquired these projects last year and put them together. And we brought aboard Louis Martin, who I've known for like 15 years, who is from Quebec to do all the compilation, get all the geochem together, the geophysics and the geology.

5:56 And so we've done that. We've flown an airborne survey. We've done surface geochem. We've done, we've prospected. So the next step now is we're devising a drilling program. So we would like to go back next summer when everything dries out and do a 5,000 meter drill program. And like I said, it's not going to cost us that much money. It's $200 a meter all in. And so that's the goal right now and get back onto the ground. Awesome. Rick, I'll get you in for that one actually, too. What are you most excited about in the upcoming year? Yeah, I think it's when I look back on it, it's quite remarkable. It's only really been a year since we had TSX approval. Since then, we've confirmed

6:42 the addition of LaBelle, which is 9 kilometers of strike length to the south of Maseau, our flagship property. Each of them we can own 100% of, which I am very pleased about and investors should know that. We're waiting on our results from the central area of Maseau. It's less known. We think it has tremendous potential because of the Kias River fault that flows through it. At that point, we'll finalize our drill targeting and we'll mount a drill program. And at this point, it could be April, it could be May.

7:18 I expect we'll be out in April. It'll depend a little bit on ground conditions, but it's not a huge program. We don't have to move great distances. And as Pat has pointed out, the cost is low. Drillers will be staying in motels. They'll get there on roadways. It's quite incredible. So I would expect in a perfect scenario, we'll be drilling in April. Awesome. No, that's great. I do want to zoom out a bit and talk about the market for a second, because I know everybody's talking about it. I spend too much of my day on X.com, the everything app, thinking about the market. But I know Pat, particularly, you've worked across press and base metals exploration throughout your whole career. I'm curious how you see current market conditions impacting the junior sector, particularly for that pre-discovery phase companies.

8:03 Yeah, I won't I won't beat around the bush. It's brutal. And I haven't seen it this brutal since the late 1990s. And yet we're knocking on the door $3,000 gold and I think there's a number of things that need to happen 1 we need a big discovery like I I can't recall the last time we had a massive discovery in Canada I Remember, you know when I was very young in my early 20s, there was a diamond discovery and luck to grab. I remember Voisey's Bay was discovered. And there's been some other smaller discoveries, but we haven't had a screaming discovery. I think we're due for 1. I think the second thing is, you know, you've seen gold at $3,000 and this quarter, or at least the last couple of weeks, I've been really watching the earnings results from the majors.

9:00 And for once, they seem to have their act together.

9:05 They're cranking out so much free cash flow. And for example, like Niko cranked out $3Bn of free cash flow, $1.6Bn of that just in the fourth quarter alone. And so these companies, they need to do something with that cash. And obviously, they're doing share buybacks, they're doing dividends, but they also need to have a pipeline of projects. So, and we are seeing,

9:32 I'm involved with Tudor Gold and we are seeing majors approach us now. It would be easier for them to put money into a junior and let the junior team do the work. So I think what's going to happen is, you know, gold's, you know, I've never been so bullish in gold in my life and I don't consider myself a gold bug. Gold just has to hang in there. And then the majors have to do their job and they have to make money, free cash flow. And I think once that happens for a number of quarters, investors won't be able to ignore it anymore. And that will give the majors a lift and then that will start moving downstream to the developers, to advanced developers, down to the grassroots exploration.

10:20 I remember going to a presentation last year and someone did a study on how many major discoveries are made by juniors and how many major discoveries are made by producers. And the overwhelming majority of discoveries are made by juniors. And I think it's because juniors are willing to take risks. They're willing to think outside the box. They're willing to go to places that nobody else goes. And so, you know, and the majors know that. So like I said, I think, you know, Gold hangs in where it is, breaks $3,000 or stays around $3,000. The majors keep cranking out the money, then that's all going to flow downhill to the juniors. But, and also, you know, a couple of good discoveries would help as well Because it's it's it's become more, you know All the easy stuff's been found all the easy deposits have been found and now we're getting to the harder stuff But the good news is we have new technology such as AI

11:16 Computing Processing power and other technology. It's hope help it as well so we can uncover these hidden blind deposits. Awesome. You know, I think Scoreboard eventually makes gold bugs out of all of us, just at a certain point.

11:33 Rick, I'll turn it to you, actually, for any additional thoughts on that. And when you think this kind of tension between precious metals prices and less than perfect results for share price appreciation juniors will close off? Well, I think, as Pat said, it's a traditional play is the big guys get nice and frothy and healthy and wealthy and they say what are we going to do with this money. One of the advantages we have with Harvest Gold and the Urban Berry Belt is Goldfields is well off. It's right. A huge investment in the belt. One of my favorite screens in our investor deck on the home page of the website is how we look compared to Goldfields in terms of our land position. We have this very large land position. We're effectively surrounded by Goldfields. We've already met with their GEO team who have been in the belt for 10 years.

12:27 We, assuming things go as we hope, Romeo, there's no reason in the world that Goldfields won't become a partner in Harvest Gold, much like

12:37 they did in Asisco. And eventually, the big guys come in, it's at a different level in the hierarchy, but they took out Asisco. That's what happens. So now Asisco is coming in and some of their management is now running Veeor, which is our partner, bigger than us, smaller than a Cisco, and the pecking order is there. Now we have the Veeor contacts who were the Cisco guys, who also have spent 10 years in the belt. So we have around us all the forces we need to support

13:09 the company becoming a candidate for a takeout. And it doesn't make sense for us to go chasing other Gold companies, unless we felt we need a bidder, or we had some massive or very high grade strike, that changes everything. But it's really a position where, will the market yet come to us? The people who've invested in us so far are really bigger money. Crescat owns 20% of the company just based on the fact that we own 50km of through going structure in the urban berry belt and we have a chance to own 100% of it. We haven't even explored yet. And they own 20 percent of the company. That's the kind of credibility that I think the retail investor wants to have a security.

13:55 The investor we're talking to today is a fund. It's not a retail group. It's a fund. Again, the level of due diligence is higher. They have to really look hard at every aspect of the company. If those sorts of investors are looking at Harvest Gold, then I want to say the retail investors, you've got some credibility with you. You don't have to do all of that due diligence. The fact that those companies are investors and shareholders in Harvest can give you some confidence that we're in the right place. Now, Discovery wins. We know that. That's where the spike comes. But the discovery with a $3,000 Gold price, I mean, that's going to help. It really is, because it will bring the eyes to the prize in this case, that drill hole that makes all the difference.

14:48 So I don't worry so too much about what's going on around us. I think inside us, we have all the makings with a $3,000 gold price and a large gold company down the road to make this happen. That's a lot of factors in your favor for sure.

15:06 Pat, I'm going to ask a couple questions about your experience. I'm curious how it does reflect into the work you're able to do at Harvest. So first is, and folks in the room might not know this, your experience with first mining is particularly impressive, taking it from $30 million to $600 million market cap through M&A. I'm curious, during that experience, what lessons did you learn that you can bring to your role here?

15:27 Yeah, that's a really good question. And I think, you know, I learned a lot when I was working with Keith Neumeier, who is a co-founder and chairman. And I think, you know, one thing I learned was, You know, when we put together first mining, the markets were in a horrible situation. And that's why we put it together to take advantage of the markets and accumulate assets. And so what I learned was sometimes you've got to go against the tide, right? You've got to go against the current. And because people said to me, why are you doing this? You guys are nuts. And I said, that's why we're doing it, because, you know, things are super cheap. And and then, you know, when we started putting these assets together, we got critical mass. We went from 0 ounces to 12 million ounces in about 18 months. So it was a new business model.

16:25 We talked about it a lot. We were out there marketing, but we were also very, very aggressive. And so the market found that very, very sexy. And the market and we were a market, we were a disruptor. The market likes disruptors.

16:38 And so I think that's why, you know, and there were a lot of, you know, a lot of shareholders who own stock and all these companies who had good assets, but they just couldn't get any love. And we were rescuing them. And the management of these companies did do a good job. It's just a tough market. But we came in there and unlocked value and built a very large Gold portfolio in a very short period of time. So, you know,

17:06 so I think it's just trying to try to differentiate yourself, try to do something that's maybe a little bit different and not being afraid to toot your own horn. And which is what I'm trying to do here at Harvest is go into a new jurisdiction, go into an area next to a world-class middle deposit. We are surrounded by gold fields, which is, you know, they have claims all around us and in a good jurisdiction. And not being afraid to toot your own horn and market and talk about the story, even when things are challenging. Because I see companies that say, hey, there's no point in marketing, things are rotten right now, but you still got to go out.

17:51 You still, you know, I'm not saying spend half a million dollars on marketing, but you still got to get out there and tell the story, no matter what, and at least get on people's radars. And I think that's the main thing I learned when I was working with Keith. I appreciate that. Do you want to shift your experience of Tudor Gold as well? Because you're a VP of Capital Markets there. So you've gained valuable perspective on what institutional investment is. Yeah, I'm going to do a plug for Tudor Gold. Of course I am. So you know what? Rick pointed out something earlier and

18:21 I'm going to put my analyst hat back on. When people ask, how do you evaluate a mining company or a junior mining company? And what's the easiest way, especially for a layman who may not have a technical background. I just look at the people. And Tudor Gold is a very intriguing story. It's led by Ken Konkin, And he discovered the Treaty Creek Project, which is owned 60% by Tudor. It has about 20, almost 28 million ounces of gold equivalent. Ken was also the co-founder of the Bruce Jack deposit,

19:00 which is owned by Newmont. And it's one of the highest grade gold deposits in the world, gold mines in the world. It's 15 kilometers away. And Ken was with Silver Standard for 20 years. So this is a guy who's made not just discoveries, but world-class discoveries. And Ken's a real geologist. Like I talked to Ken and he's super technical and he breathes, sleeps, eats geology. And so that's, you know, you always want to hook your, You always want to get involved with people that have this kind of track record. Again, that's why I worked with Keith Neumeyer, again, a guy who had a track record. I was at Trilogy Metals for 7 years and that was originally run by Rick Van Nuenhuysen, who you guys know very, very well. And Rick's done very, very well and Contango is doing very, very well. So I always try to work with people that have done this before. Rick's done this before at VMS Ventures.

20:01 So that's the number 1 thing. Second thing, Tudor Gold made a big discovery last summer and very high-grade Gold. And Ken seems to think that could be another root gap. And We drilled 7 holes, 10,000m in every hole at high-grade Gold mineralization, and it seems to pull together. So it's just a tremendous discovery. And the deposit itself,

20:31 the Goldstorm deposit, Ken discovered that in 2019. So it's a relatively new discovery. So, you know, that's why I, and you know, Tudor Gold, we have a lot of work to do.

20:43 It's got great jurisdiction. It's got 160 million market cap. It should be half a billion easily because how big that gold deposit is and because of the high grade. So those are the reasons why I came over. And we're in Northwest British Columbia, specifically in the traditional lands of the Tall Tan First Nation. And the Tall Tan, they're miners. They're very sophisticated, they're great to work with. So just like Quebec, you know, Northwest British Columbia is also a good place to work in, which is one of the reasons why I came over. Sure. I got one for you. I know you've been involved in a large number of M&A transactions over the course of your career. I'm curious, what qualities do you think mid-tiers and majors look for in potential strategic partners or opportunities? And what do you see there reflected at Harvest Gold?

21:30 Yeah, that's a great question. And I think they, you know, obviously it's potential and mineral potential. How big is it going to be? And is it going to be economic? Right. And, you know, we see that Neko has been very, very busy doing deals.

21:49 You know, did investment in Atex last fall, and Atex is actually very similar to Tudor Gold. It's a large

21:58 copper porphyry, it's also deep. And, you know, they're looking for something that's going to be world-class, potentially be world-class, right? You know, they want something that's going to have a lot of ounces and even has the potential for a lot of ounces, right? So it's not going to be a half a million ounces or a million ounces. You're probably going to need to see at least 3 to 5 million ounces in the ground potentially for them to get involved. And again, jurisdiction, I think, has become even more critical than ever. You look at Barrick and their struggles in Mali. And Mali used to be a phenomenal country. And now, you know, Canadians used to be all over Mali and now Mali is very, very challenging. Right. And other Chile is very, very challenging. You know, And a lot of Africa has become very, very challenging. So, you know, I think they want to, I think Canada has become even more popular because of the geopolitical stability, which again is why Harvest Gold is in Quebec. So I think they want to see something that's potentially big. They want somewhere where they don't have to worry about some government stealing it from them.

23:08 Or, you know, you look at, you know, like first quantum dealt with in Panama, like what a disaster for COVID in Panama. And so, you know, you don't want any hiccups. So, and the majors now, like I said, they're cranking out so much cash, they have to be looking around. They have to be looking around to find something to do with some of that cash. Sure, that makes sense. And speaking of jurisdiction actually, Julio in the audience, I always like to shout out when there's other Italians in the room, Julio, good to see you. He asked, does Quebec still offer exploration rebates? Rick, I'll throw that to you. Yes, they do. And we're still trying to clarify. I think some of our lands, our properties, about half of them are north of the 49th, which I'm told is going to be in the neighborhood of a 40% rebate, 30%

24:00 below the line is what I understand is the case, which is a tremendous news for investors. British Columbia, I must say, my 1 shout out to British Columbia, they had a 20% rebate, which is, it's hard money. And investors may know hard money is a challenge to raise. Flow through is popular in Canada. Charity flow throughs are popular in Canada. That money has to be spent on the ground. But the cost of running a public company, including marketing, if

24:30 you're going to do that, but all of the all of the things that relate to the functions of the public company itself are all hard dollars. So imagine we spend a million dollars on the ground. We end up with a check back for $400,000 the next spring. It's music to the investor's ears because that money does not have to be raised in a dilutive fashion. And that money can run the public company. And then you get back to spending money on the ground and then it multiplies. With success if you're spending $5 million on your program, et cetera. And so it really puts the company on a forever scale because that kind of money can always run your public company.

25:17 So if you could convince people then to fund your exploration program, they'll know in their rebate programs in Quebec, they're funding the public company. And all that good money is going into the ground. We're very lean, we have a small overhead relative to many junior companies. So we're eager to get that little roll going, Romeo. It's fantastic. Sure. Another question from the audience we've already tackled. Somebody asked, what's the cost per meter to drill? So the $200, which is very lovely. But somebody else from the same breath wanted to know how many meters are in the next drill program, anticipated or desired? We're talking about 5,000 meters. It'll depend on how much money we raise and put into the ground. We'd like to do a minimum of 3, of course. But we're expecting 4,000 to 5,000 meters.

26:03 Great. And somebody else asked over email, it's always a tough question, you're looking at a crystal ball here, but what is the long-term objective for Harvest Gold? Are you guys looking to build a mine or sell to a major mid-tier? Well, I'll take that. I mean, realistically, who are we? I mean, think about who you have to be to run a mine. Pat's experiences are varied. He's not a mining engineer. You know, what our investors want today, Romeo, is discovery. We've all seen the chart. We are a discovery investment. We're trading at 3 and a half cents. VMS was at 6 cents when we first financed it. It peaked at a dollar 70 after a remarkable drill hole. We were able to raise 20 million dollars. That became a small mine. But the investors who made the money were the ones who invested pre-drilling.

26:53 So this is the time, if you're into the high risk, high reward game, this is the time you wanna own harvest Gold ahead of our drill program. And that's the nature of the time between the discovery and the decision for the big guy to come and get you is varied. Pat had an interesting take on it. I think we're going to be in a position where we probably won't need as many ounces for Goldfields to take us over. They'll probably take it over and just add it to their large land position and develop it themselves at their own pace as it relates to what they're doing down at windfall. That's what I would imagine would happen. And they'll come in in stages. So I think it really is important to understand that the time between discovery and becoming a mine and running and developing a mine is a long time. And it requires a whole different set of expertise.

27:54 Sure. No, appreciate that very much. Now. I always love this happens rarely, when somebody puts into the chat, the question I was going to wrap up on. So I'm going to go to TB from the chat who asks really the central question is in the title of this webinar, which is of all the Explorer co's, what makes Harvest different? Why now? I'll throw it to both of you, but Pat, I'll start with you. You know what? There are a lot of exploration companies out there. There's like thousands of them and you know what 1 theme I've heard about it from pundits is there's so many lifestyle companies and this is definitely not a lifestyle company I don't get paid anything I own equity I don't stock options. Rick makes like very little money.

28:41 We have a very low burn, very, very low burn rate. And So every dollar that we raise goes into the ground. I wouldn't do this if this is a lifestyle company. Like we're serious. And we have quite a number of us who are advisors. So for example, we have Henry Allmac, we have Neil Richardson, we also I'm missing there. Rick Bates, Louis Martin. We have a very we have 5 of us that are on our technical team. We're all experienced geologists with decades of experience. So this is about pure discovery. And I'm doing this because I enjoy it.

29:31 I enjoy, I don't do much exploration anymore. I'm in the office most of the time or or visiting shareholders, but I still get the exploration bug. And that's why I'm doing this. And it's just pure exploration. And the nice part is Rick does all the hard work. He deals with all the boring corporate stuff and raises the money and manages the office. And then the rest of us can sit down with Louie and actually do the technical stuff and do pure exploration. And it's a tight, little, lean company. And that's why we do it. I appreciate that, Pat. Rick, I'll throw it to you to wrap us up today. Shameless as possible, Why should investors think about Harvest right now?

30:17 Well, first of all, it's a virtual office. We have virtually no overhead. So it's important. We don't have an office. Why do I have an office these days? It's crazy. We have all kinds of adjunct folks that help us. They've been with us for years. And in the case of all the guys that are on the Geo team, they're crazy enough to work with me. And it's just so, as Pat says, it's so much fun. These are such smart guys. So I think the investors, number 1, you have to have a technical team. Doesn't matter what you have. If your technical team is not experienced and successful, forget it. These guys are fantastic. I think we've touched on the high points. 1 today is the opportunity, the entry point.

31:04 You're at something like a $2M market cap and you own 50km of strike length, as Louis calls it, or flow-going structure between these 2 significant geological structures where mines occur in an environment where Goldfields now is bought in owns the windfall deposit, which is how many ounces, Pat, is windfall? Oh, I can't, off the top of my head, I don't know, was it 8 million or something like that? It's 4 million. Anyway, it's big. It's high grade. Yeah. And we're in the neighborhood. Bottom line, if we have a chance to own 100% of all all of these properties, The entry point is excellent. We have done almost no marketing, Romeo. This is as much as we've reached out in 4 years, frankly.

31:54 So people really don't know about us. Well, as I said before, we're talking to institutions, not to the retail investor. Now, again, it's high risk, high reward, but you know where the money's going. You know what the opportunity is. So I think it's that timing now is pre-drill. That's why we're out talking to retail investors, particularly now. The stock's at 3 and a half cents. Typically, the rollover, as Pat suggested, is people sell their Agnico on a nice move, and they buy a little bit of harvest, or they spread it among their favorite 5 juniors and they reinvest and look for the next discovery. So I think timing is excellent, Romeo.

32:42 Awesome. Well, Rick, Pat, I know I've kept you a little longer than we expected, but I appreciate it very much. Everybody who's in the chat and joined us today and those watching the replay, thank you as well. Always enjoy, and thanks for taking your time out of your day, but this was great. Thank you both so much for the conversation. Appreciate it. Thanks, Romeo, and thanks to everyone watching. It's very kind, appreciate it. Awesome, Have a great afternoon, folks. Thanks, Pat.