Auryn Resources with Ivan Bebek
Published in July 21, 2017on
00:00:09 Auryn Resources is a company that's the third of two great successes we've had. It's actually going to be the most exciting one that I have ever seen to be lectured, to be part of my last 18 years in the business. As we're about to undertake the world's largest discovery drill program for gold in the next six months in a condense period of time.
00:00:29 With that being said, I will be making stuff forward-looking statements just because we are excited and some of these projects have some very big potential. A theme at Auryn is maximum reward with minimum risk and how do we do that? We do that for a portfolio approach. Where we're different than most other juniors that have exploration portfolios, multiple properties is ours is live meaning, we're going to drill our entire portfolio in the next six months.
00:00:55 The experience behind us is not just technical but it's also financial and corporate. We've been able to find gold mines. We've been able to sell companies. We've been delivered tremendous value for shareholders in that and you'll see here in just a few slides.
00:01:09 I've underlined the exceptional technical team. Those of you who are not familiar with us, we are fortunate enough to attract nuance global exploration team in the downturn. We're a junior resource company with a major exploration team minute and none of the red tape that would go with that. Lastly, it is about the efficiency and discovery capital being spent. We're spending about $36 million in the ground this year from January until December. 4 million will go towards GNA and marketing ourselves, but I think about that as a shareholder. 90 percent of our treasury goes into the ground. It's real money to go and find major gold mines.
00:01:45 This is a bit of our past successes that we've had. We've raise half a billion dollars as needed. We've never had an issue raising money. Our first company was called Keegan Resources. It's our second best success where we create a producing mining company from zero to 5 million an ounce and then we acquired to five more. That's 10 million an ounce company that trains with the NYSC and as well as the Toronto Stock Exchange, but again, that's our second best success that we've had.
00:02:11 Cayden was our first best success or the best success you could have. We sold the junior exploration company in the middle of the bear market for $205 million. A tremendous share price appreciation and there was a time when nobody was making money on resource stocks. There were no resources, no official deposit in Cayden, and that was kind of the wizardry of what we're taking on with Auryn. We're taking what we learnt about Keegan which is not Asanko Gold and then Cayden, we're putting it on ore and doing something even better that's never been done before.
00:02:40 This here is a slide representing exactly what I am standing here today not because this is our resume of our first two companies, but we're showing you the discovery curve as it existed for Keegan in the last bull market, $0.49 and $9 per share. That's a discovery of 5 million ounce gold deposit in Ghana. Then we're showing you in the middle of the bear market a discovery that was under way, a 100 drill hole where the stock went from $0.67 and we sold it at $3.50 per share which has gone up since we took Agnico shares. That multiple, those returns were taking 25 shots at finding something like this in the next six months in Auryn. That's how big Auryn can be going forward this year.
00:03:16 This slide portfolio approach, there are seven major projects. There're three in Canada, they're all high grade. There's four down in Peru. Peru is all oxide. The most profitable types of metal, you can mine or find or high-grade gold or oxide gold with infrastructure and we have both of those in our portfolio. The odds is always against you in the exploration business but we have projects that will reduce the risks significantly. The more shots you take, the better chance you have of hitting.
00:03:43 We're taking 25 major shots from June of this year until December of this year. We own 100 percent of everything or we have the option to earn 100 percent. We have ownership of everything. If we find something, we get to rip the full reward.
00:03:58 Moving on, our capital share structure, 76 million shares out. Our couple notable things in this slide is our shareholders, not only our existing retail shareholders who followed us from our previous successes but Goldcorp became a shareholder in January at $3.67 per share. Goldcorp came in at a premium to market. It was a great validation of what we have as a portfolio and what we might be able to find this year.
00:04:20 Management owns over 18 percent. A lot of that was purchased in the public market. If you look in the yellow boxes, the last year was predominantly acquisitions. We did about four acquisitions last year. This year is going to be all about discovery drilling. This is where you make money a shareholder. This is why this stock is starting to perform. People are starting to speculate, we may make a few major discoveries this year.
00:04:41 I won't go into too much detail about ourselves, but I will say, we're very balanced. There're people on this slide that are from the corporate aspect, very strong. Financially, very strong, and technically. I will say, as we build this companies, we have more and more better people along the way. Great management teams draw great people.
00:04:59 The world class technical team. This is something we've very proud off. If you look through this list or go to our website, you can read more about them. What makes us different from most juniors, even most majors, it's deeper by depth of amount of people on page as well as people are aren't on this page. A lot of them are former global experts from Newmont including the Former Chief Geologist of Newmont, Antonio Arribas or Rael Lipson, the Former Chief Geologist of Gold Fields. These are really, really, really, really high experienced, intelligent experts that have come togetehr as a team to help us define those portfolios or everything we're looking for is of the magnitude that would impress them or they were with the major.
00:05:39 Moving ahead, this is a quick snapshot of what we are. Northern Canada or in Canada. We're in the Nunavut with Committee Bay and Gibsons MacQuoid. We're about 420 kilometers of Greenstone belts. They're a place where a lot of money is being spent, I'll go into just a moment and there's some existing resources there already. Homestake Ridge and BC is in a place called the Golden Triangle. Golden triangle is one of the richest places of endowment in the world for gold mines. There's 1.2 million of ounces approximately of gold equivalent in Homestake of 9 grams per ton. That's incredibly high-grade.
00:06:10 We think that could possibly double or triple on the back of this year's draw program that we're about to turn or take. If you come down to Peru and the southern portion of my map, where it said one word for Peru is endowment. Everything in Peru is big. Yanaqucha, 60 million ounces of gold. Las Bambas were sold in 2014 for $6 billion to MMG by Glencore. There's major discoveries down there, major mines, so we have a high-grade in the north. We have oxides scalable, large projects in the South.
00:06:38 Here's a quick snapshot, Committee Bay's and yellow at the top. Gibsons MacQuoid is down at the south. In green you can see Agnico Eagle is committed to spending $1.2 billion in the artic. They said that in Q1 of this year. That's a really tremendous undertaking by them. They've got a new mine called Amaruq, where in three years, they got about 7 million ounces and it stills getting bigger. They've also got Meliadine. It's about 11 million ounce deposit that they're about to build to about taken to production.
00:07:04 Committee Bay, Gibsons MacQuoid, it's big. It's high-grade. We think the frontier for high-grade gold discoveries large ones in a world will be in the north.
00:07:14 This is a quick snapshot of Committee Bay. District grade, scale and massive potential for discovery. Those yellow lines are outlining corridors and mineralization. In red, we're actually showing you the top 2 percent of the entire belt. We are recently marketing in New York so we show the size of Manhattan of how big some of these corridors are.
00:07:33 If you look at the lower right picture, it's the distance from Boston to New York. There're 67 discoveries along this belt prior to us getting this priority. They had no follow up. Very minimal work has been done and we've taken it to the next level this year as we get ready to drill. This deposit is in the middle of the belt. It's about 1.2 million ounces of 8 grams per ton. We're drawing a wipe aligned here in the top 150 meters because the drilling we're going to do this year will only reach 150 meters from surface. We're trying to find the start of two more of these, but if you look at some of the results, 14 of 7 grams, 12 of 15 grams, 39 or 12 grams.
00:08:10 If you start to see that come out of our summer drill program that starting about two weeks from now, that's going to mean we're onto something big that could be like in Amaruq or another three bluffs. That's what we're going for. We're taking 12 shots at finding 12 Amaruq's this summer.
00:08:24 The infrastructure, that's a big challenge up there, fortunate for us. There's been 100 million spent of which 30 million roughly went into the ground of setting up camps. All the heavy equipment, everything you see on this slide, we own except for the 737 aircraft. We just bring few each year, very turnkey exploration.
00:08:41 Now moving over to Homestake Ridge in BC, we're looking at the Golden Triangle. We've got in the yellow blocks there, I don’t think I have a laser pointer. You can see the Homestake main zone as well as it's Homestake silver zone in the south riff zone, that's what makes up the 1.2 million ounces of 9 grams gold equivalent. There's a massive EMS, Eskay Creek target. There's obvious deposit extensions to the north and to the south of the main zones and the silver zone. Then the South Reef Zone, the Vanguard Trend. It's about 6 kilometers long, 3 to 20 grams gold taken in rock samples, barely even touch with the drill beat. This year will be about unlocking the triangle and if we can get to 2 or 3 million ounces or 9 grams per town, it be a tremendous success for us.
00:09:23 One thing we did do here is we unlock tremendous value with a metallurgy. Before we got this project, they were blending to concentrates. We separated them. We're getting 84 percent recovery in gold and about 88 percent in the copper concentrate and about 88 percent gold recovery in the lead concentrate. There's a road that goes to deep water ports 7 kilometers away, so the economics of what we've done in the back of the [inaudible 00:09:47 ] are extremely favorable. It probably cost around 125 million to build. They probably have about 14 months payback and about $375 million U.S. MPV as we sit here without finding more ounce of gold. If we double the gold that's there, we'll be pushing a billion dollar MPV because of how reach it is and how close it is to infrastructure.
00:10:07 This is a look up to deposit and gold is the red portion, it's outlining the gold portion. Silver is representing in the blue portion. You can see there's a zonation effect, in gold, silver and gold then you get into gold and copper. To the left side of the screen, you seen something called the Slide Zone, Silver Slide Zone, it goes for 3 kilometers. We're showing you some core that was drilled at the higher portion of it but no drilled deeper to the depth to test the gold target. We think that's very low hanging fruit to just keep adding deposit towards the side from that portion.
00:10:37 Moving down to Peru, the word was endowment. We've listed some of the big mines that have been found in Peru. Sombrero's gotten everyone's attention. It's one of the best projects we've ever seen. The whole entire technical team pre-drilling in terms of grade, in terms of endowment potential. It's about 200 kilometers west of Las Bambas. Then we have three projects right next to Chile is what we'll talk about those in a second.
00:11:00 The one thing we do get in Peru is excellent infrastructure. There's power lines, water and roads to each one of our projects. That is incredibly, incredibly opportunistic for profitability because everything here improves from surface. It's open pit and it's oxide.
00:11:15 This is Sombrero snapshot of it. What the geologist are showing you here is some of the best or the right ingredients for our major skarn discovery. The limestone, the diorite intrusive, and then they're showing you some of the grades that were taken. There's better grades, there's lower grades but averaging in the multi-gram and multi-percent copper. Those are spectacular grades because there's 200 kilometers west of Las Bambas which average under a gram gold equivalent. These are obviously much richer and there's a much bigger gold component here.
00:11:42 This is a surface look. It's a bit technical. What we're trying to show you here is that wherever we've gone and taken samples, we're getting a lot of grade, a lot of gold, a lot of copper. No one's ever drill this before. In the big mines in Peru, these things appear as clusters. You're looking at clusters here. There are three more of this page and land that we have staked, but this certainly has the whole marketing to be something even bigger than that Las Bambas was by structure and by grade.
00:12:08 Moving ahead, Baños del Indio and Huilacollo, this is in southern portion to right of Baños or south of Baños, you're running into a mine called La Guapa which is operated by Kin Ross which is about 7 million ounces of gold. Same heated alteration type of systems in Baños del Indio. Then we have [inaudible 00:12:26 ]. Has a nice oxide deposit, top of the hill barely drilled.
00:12:28 What we're trying to show you here is this big north-south structure that connects the two properties. That was critical in Yanaqucha. That was the deep restructure that hosted the 60 million ounces of gold. In here, it appears to be the same. Baños del Indio is massive. It's the same scale in size as La Cuapa, but [inaudible 00:12:45 ] is the one that has a better work on it and this is what it looks like.
00:12:48 You can see in the top box, there's some 80 or so meters of a 1.2 grams per ton. This is oxide, the top of the hill. I'll show it to you 3D in just a moment. We did some work in the fall, in the bottom square, everything in pink is really highly anomaly's gold from surface. We did some surface work. Huge targets coming out of this project. Infrastructures are friend. You're mining the top of a hill. Once you get to deposit, the pink shape would be the actual or that would get mined.
00:13:15 You can see some of the grades that were drilled but also the trench. 38 meters of almost 7 grams per ton across the structure. The 38 meter is 7 grams for ton is on that north-south structure that goes up to Baños del Indio. Really critical when you look at something from a district or regional perspective is certainly has the gold there. It has all the structural components for size and then it also has the oxide, the power and the water nearby. That's my original point.
00:13:40 89 percent of our treasury goes into exploration and drilling. That number is 36 million this year. This is how we spent our money. We're very proud of the slide as large shoulders of our own company. Gives us the best shot to perform for you guys in the next six months.
00:13:54 This is our drill program. It's starts June 10th. I believed, we'll announced it June 3rd, the exact day it's going to start. We start in a Committee Bay. We actually add more rigs into Homestake in BC so we'll be drilling both our Canadian projects the same time. Once those drills are completing, we'll start drilling in Peru. Drilling in Peru says plus 5,000 meters. I can tell you from what we've seen so far, we're going to drill a lot more than that in Peru. No. Our money does not cover a lot more meters. Would we refinance? We probably would in the late fall on the back of some results out of the drilling in Canada. Money has never been an issue for us.
00:14:31 Just to summarize, the opportunity in orange is unique to itself. The quality and scalability of everything we have, those 25 shots were taking. Those are 25 shots at finding 5 million ounce size deposits. Those are massive or bigger. The experience that we have in doing this, this is our third company that we're doing. We're doing this because there's a big opportunity in the bear market. We had a great success.
00:14:53 We went shopping not just for us, it's about for people and we put together this portfolio. Where not only do we own the projects. We have a big ownership ourselves but we have a major who's invested into us.
00:15:04 I had a premium to market which is a great validation of what we have. The optionality of company with multiple projects is quite obviously. We could sell them one at a time. We could sell the whole company as a whole. We think that the scalability of this projects will lead to a transaction much before we get up the chance to actually build these thins and take them into production.
00:15:22 Then lastly, the catalyst, the drill bid. That's how all the money is made. One drill hole can give you a quadruple on your share price. We're drilling about 300 holes this year from June until December across 25 different projects or targets across 7 projects. This is going to be substantial. We're going to have a huge discovery here.
00:15:41 Thank you very much ladies and gentlemen.